Check my work 5 Bowen Company manufactures one product, it does not maintain any
ID: 2569139 • Letter: C
Question
Check my work 5 Bowen Company manufactures one product, it does not maintain any beginning or ending inventories, and its uses a standard cost system. Its predetermined overhead rate includes $1,000,000 of fixed overhead in the numerator and 50,000 direct labor-hours in the denominator. The company purchased (with cash) and used 35,000 yards of raw materials at a cost of $10.30 per yard. Its direct laborers worked 20,250 hours and were paid a total of $290,500. The company started and completed 8,600 units of finished goods during the period. Bowen's standard cost card for its only product is as follows: 14.28 points Standard Price or Rate Standard Cost Print Standard Quantity or Hours Inputs Direct materials Direct labor Fixed manufacturing overhead 3.5 yards 12.50 per yard $ 43.75 2.9 hours 2.9 hours $14.00 per $20.00 per 40.60 58.00 $142.35 Total standard cost per unit Required: 1. When recording the raw material purchases: a. The Raw Materials inventory will increase (decrease) by how much? b. The Cash will increase (decrease) by how much? 2. When recording the raw materials used in production: a. The Raw Materials inventory will increase (decrease) by how much? b. The Work in Process inventory will increase (decrease) by how much? 3. When recording the direct labor costs added to production: a. The Work in Process inventory will increase (decrease) by how much? b. The Cash will increase (decrease) by how much? 4. When applying fixed manufacturing overhead to production, the Work in Process inventory will increase (decrease) by how much? 5. When transferring manufacturing costs from Work in Process to Finished Goods, the Finished Goods inventory will increase (decrease) by how much? Mc Graw Prev NextExplanation / Answer
1a)Raw material will increase by 35000*10.30=$ 360500
cash will decrease by 360500
2)Raw material inventory will decrease by 360500
work in process will increase by 360500
3)Work in process will increase by 290500
cash will decrease by 290500
4)Predetermined overhead rate = estimated overhead /estimated direct labor hour
= 1000000/50000 =$20 per hour
work in process will increase by 20*20250=405000
5)finished goods will increase by [360500directmaterial used +290500 direcy labor+405000overhead ] =$ 1056000