3) Beginning work in progress (WIP) was $116,000, and ending WIP was $117,300. If total manufacturing costs were $349,000, what was the cost of goods manufactured?
Solution: $347,700
Working:
Cost of goods manufactured = $349,000 + $116,000 – $117,300 = $347,700
4) If the conversion cost is $84 per unit, the prime cost is $55 and the manufacturing cost per unit is $105, what is the direct materials cost per unit
Solution: $21
Working:
Prime cost = Direct materials + Direct labor
$55 = Direct materials + Direct labor
Direct materials = $55 – Direct labor
Now,
Conversion cost = Direct labor + Overhead Overhead
$84 = Conversion cost = Direct labor + Overhead Overhead
Overhead = $84 – Direct labor
As, Product cost = ($55 – Direct labor) + Direct labor + ($84 – Direct labor) = $105
or, Direct labor = $34
Direct materials + Direct labor = $55
Inputting values, we get Direct materials + $34 = $55
Direct materials = $21
5) Total manufactureing costs for August were $412,000. Prime cost was $64,000 and beginning WIP was $76,000. The costs of goods manufactured was $434,000. Calculate the cost of overhead for August and the cost of WIP
Solution: $348,000 and $54,000
Working:
Cost of goods manufactured = Total manufacturing costs + BWIP – EWIP
$434,000 = $412,000 + $76,000 – EWIP
EWIP = $54,000
Total manufacturing costs = Prime cost + Overhead
$412,000 = $64,000 + Overhead
Overhead = $348,000