Maddox Smith Staff asked 5 years ago

Materials Inventory

Question 2: Total 11.5 Marks Part (a), for 10.5 marks: Armidale Incorporation’s books for 2014 (January 1 to December 31) contain the following information: • Inventory for direct materials showed a reduction of $4,000 during 2014. • Materials inventory at the end of the year was exactly half of the materials inventory at the start of the year. • Work in process inventory at the start of the year was $145,000. • Finished goods inventory at the end of the year was $65,000. • Direct materials worth $150,000 were purchased during the year. • Direct materials used were 2.5 times the cost of direct labor. • Manufacturing overhead amounted to exactly half of the cost of direct labor. • Total manufacturing costs incurred during the period were $246,400; these costs (total manufacturing costs) were 80% of cost of goods manufactured and $156,000 less than cost of goods sold. Compute/work out the following, showing all your workings/calculations: a) What was the beginning finished goods inventory for the year? b) What was the closing work in process inventory for the year? c) How much direct labor cost was incurred during the year? d) How much manufacturing overhead cost was incurred during the year? e) How much direct materials were used during the year? f) What was the beginning materials inventory for the year? g) What was the closing materials inventory for the year? The updated file gives the instructions on how to do the questions