Question

4. DER, Inc., manufactures a single product. The following information is available for 2022: Raw materials: Beginning balance: $5,000. Purchased $40,000 on credit. Direct materials used in production were three-fourths of direct materials bought. Work in process: Beginning balance: $3,100. Ending balance: $12,900. Units transferred out: 10,000. All units have the same average cost. Finished goods: Beginning balance: 0 units. Ending balance: 1,000 units. Also known: Prime costs $55,000 Indirect labor $11,000 Factory insurance $2,500 Utilities $8,000 (80% relates to production) Factory depreciation $7,000 Sales $14 Per unit Administrative and selling costs (other than utilities) $22,000 a. Complete the T-accounts for raw materials, work in process, and finished goods. b. What is the ending balance of raw materials? c. What is overhead? d. What is cost of goods manufactured? e. What is gross margin? f. What are period costs? g. What are conversion costs?

          4. DER, Inc., manufactures a single product. The following information is available for 2022:
Raw materials: Beginning balance: $5,000. Purchased $40,000 on credit. Direct
materials used in production were three-fourths of direct materials bought.
Work in process: Beginning balance: $3,100. Ending balance: $12,900.
Units transferred out: 10,000. All units have the same average cost.
Finished goods: Beginning balance: 0 units. Ending balance: 1,000 units.
Also known:
Prime costs
$55,000
Indirect labor
$11,000
Factory insurance
$2,500
Utilities
$8,000
(80% relates to
production)
Factory depreciation
$7,000
Sales
$14 Per unit
Administrative and selling costs (other
than utilities)
$22,000
a. Complete the T-accounts for raw materials, work in process, and finished goods.
b. What is the ending balance of raw materials?
c. What is overhead?
d. What is cost of goods manufactured?
e. What is gross margin?
f. What are period costs?
g. What are conversion costs?

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4. DER, Inc., manufactures a single product. The following information is available for 2022:
Raw materials: Beginning balance: 5,000. Purchased40,000 on credit. Direct
materials used in production were three-fourths of direct materials bought.
Work in process: Beginning balance: 3,100. Ending balance:12,900.
Units transferred out: 10,000. All units have the same average cost.
Finished goods: Beginning balance: 0 units. Ending balance: 1,000 units.
Also known:
Prime costs
55,000
Indirect labor11,000
Factory insurance
2,500
Utilities8,000
(80% relates to
production)
Factory depreciation
7,000
Sales14 Per unit
Administrative and selling costs (other
than utilities)
22,000
a. Complete the T-accounts for raw materials, work in process, and finished goods.
b. What is the ending balance of raw materials?
c. What is overhead?
d. What is cost of goods manufactured?
e. What is gross margin?
f. What are period costs?
g. What are conversion costs?

Added by Sara L.

Horngren’s Cost Accounting

Srikant M. Datar, Madhav V. Rajan 16th Edition

Instant Answer

Solved by Expert Akash M

09/07/2023

Step 1

Complete the T-accounts for raw materials, work in process, and finished goods: Raw Materials: Beginning balance: $5,000 Purchases: $40,000 Direct materials used: (3/4) * $40,000 = $30,000 Ending balance: $5,000 + $40,000 - $30,000 = $15,000 Work in Show more…

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Transcript

00:01 We need to calculate different things at a less complete the accounts for raw material working progress and finished good the first for raw materials beginning balance.

00:15 We have beginning balance is $5 ,000 purchase $40 ,000 direct material used $40 ,000 multiply by 3 4th that is $30 ,000 balance.

00:42 So to be calculated like what we have to do the beginning balance and add this so we approximately got 35 ,000.

00:54 Oh, okay balance is that material used now.

00:59 So here it is 10 ,000 and which is $15 ,000.

01:04 Now for the work in progress.

01:13 Beginning balance.

01:16 3100 unit transferred out cost of good manufactured.

01:26 We don't have unit transfer 10 ,000 units ending balance.

01:36 12 ,900 now finished good the account.

01:42 So here for the finished goods the beginning balance zero units unit transferred 10 ,000 units ending balance.

02:02 1000 units.

02:03 Now, this is the first for the b part to calculate the ending balance how we can calculate beginning balance, which is $5 ,000 plus purchases $40 ,000 minus direct material used $30 ,000.

02:26 So we will got $15 ,000.

02:31 Now this c part about the overhead.

02:36 So what is overhead overhead is indirect manufacturing cost indirect manufacturing cost that are incurred in production process incurred during production process, but cannot be traced cannot traced directly to a specific product in this case, how we can calculate overhead indirect labor, which is $11 ,000 plus factory insurance, which is $2 ,500 plus utilities $22 ,000 factory depreciation $7 ,000 other indirect costs...

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