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  • Jul 6, 2011, 06:25 PM
    Capt_k1313
    Accounting help
    If a company's overhead rate is 50% of direct labor cost. Using the following incomplete accounts, determine the cost of direct materials used.
    Goods in Process inventory Finished Goods Inventory
    Beg bal 200,500 beg bal 218,000
    DM? 425,000 407,000
    OH? FG?
    End bal 231,560 end bal 248,000

    Factory Overhead
    103,020 100,220
  • Jul 7, 2011, 12:11 AM
    dom.b.fortin
    Kindly present your data in an organized manner. We can't understand what amounts are to what items. Thank you.
  • Jul 7, 2011, 05:47 AM
    Capt_k1313
    If a company's overhead rate is 50% of direct labor cost. Using the following incomplete accounts, determine the cost of direct materials used.
    Goods in Process: beg bal 200,500
    DM: (unknown)
    DL: (unknown)
    OH: (unknown)
    FG: (unknown)
    End bal: 231,560

    Inventory Finished Goods Inventory: beg bal 218,000
    425,000 407,000 (this is set as a T)

    End bal 248,000

    Factory Overhead
    103,020 100,220(this is set as a T)
  • Jul 7, 2011, 06:34 PM
    dom.b.fortin
    Sorry I can't understand the FG part, does that include beg + T-account debit & credit then ending balance?cz the beg + dr - cr won't result to the end.

    Not minding that, I think the answers would be
    FG = 425,000 this is in the given as this is the amount debited to FG from WIP
    OH = 100,220 this is also given as this is the amount credited from OH to transfer to WIP
    DL = OH/.5 = 100,220/.5 = 200,440

    Then fill in all known variables in the equation to get DM
    WIPbeg + DM + DL + OH - FG = WIPend
    200,500 + DM + 200,440 + 100,220 - 425,000 = 231,560
    DM = 155,400

    If you have something to lighten my doubts on the given itself, please tell me so we can change the solution as applicable.Thank you.

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