[SOLVED] Question & Answer: Selected T-accounts of Moore Company are given below for the just completed year: What was the cost of raw…..

Question – 1

Cost of material used in the production = Total available – Balance at the ending

= 30000 + 150000 – 40000 = 140000 worth of material used in production.

Question – 2

Work in process is debited with material cost of 105000 which is direct material. So Indirect material shall be 140000 – 105000 = 35000

Question – 3

Total Wager cost of current year = 210000 ( see in T-account – Factory wage cost)

Out of this Direct wage cost = 195000 ( refer to WIP account)

So Indirect wage cost = 210000 – 195000 = 15000

Question – 4

Cost of goods manufactured = 515,000 ( refer to WIP a/c …credits)

Question – 5

Cost of goods sold = Beginning Finished goods + Cost of goods manufactured – Ending Finished goods

= 55000 + 515000 – 82500 = 487,500

Question – 6

Predetermined rate based on direct wages = Factory Overhead applied to production / Direct wages * 100

= 214500 / 195000 * 100 = 110%

Question – 7

Under / over absorption of overhead

WIP account indactes that 214500 was absorbed during the year. But Factory overhead a/c indicates total debits of 189,500 ……..So this clearly over absorption.

Over absorption of overhead = 214500 – 189500 = 25000

Question – 8

Ending WIP = Total debits in WIP —– 549500 and credits = 515000. So balance = 34500

When wages are 11750, we have overhead = 11750 * 110% = 12925

So Material cost = 34500 – 11750 – 12925 = 9825

Applied overhead cost = 12925