The Enrique Company recorded the following transactions for February 20x1:MaterialsWork in ProcessFinished GoodsPurchases$100,000??Beginning inventory180,000$ 8,000$ EEnding inventoryA30,00030,000Direct materials used?90,000?Direct labor?B?Manufacturing overhead (includes indirect materials used of $10,000)?115,000?Transferred to finished goods?C?Cost of goods sold??DSales were $560,000, with sales prices determined by adding a 40% markup to the firm's manufacturing cost. The total cost of direct materials used, direct labor, and manufacturing overhead during the month was $285,000.Note: The materials account includes both direct materials and indirect materials.Required:Calculate the missing values.
What will be an ideal response?
Solution:
| Item A. | ? |
| Beginning materials | $ 18,000 |
| Add: Purchases | 100,000 |
| Less: Direct materials used | (90,000) |
| Less: Indirect materials used | (10,000) |
| Ending materials | $ 18,000 |
| Item B. | ? |
| Total production costs | $ 285,000 |
| Less: Direct materials used | (90,000) |
| Less: Manufacturing overhead | (115,000) |
| Direct labor | $ 80,000 |
| Item C. | ? |
| Beginning work in process | $ 8,000 |
| Add: Total production costs | 285,000 |
| Less: Ending work in process | (20,000) |
| Transferred to finished goods | $ 273,000 |
| Item D. | ? |
| Sales | $560,000 |
| Divided by rate | ÷140% |
| Cost of goods sold | $400,000 |
| Item E. | ? |
| Ending finished goods | $ 30,000 |
| Add: Cost of goods sold | 400,000 |
| Less: Transferred to finished goods | (273,000) |
| Beginning finished goods | $ 157,000 |
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