On October 1, the Florida Company had the following inventories: Materials, $ 24,000; work in process, $ 12,000; and finished goods, $ 36,000. During the month, materials purchases totaled $ 56,000. Direct labor for October was $40,000, at a uniform wage of $ 6.40 per hour (Total Labour Hour = 6250). Marketing and administrative expenses for the month amounted to 10% of net sales. Inventories on October 31 were as follows: Materials, $ 20,000; Work in process, $ 8,000; and Finished goods, $ 40,000. Net sales for October totaled $ 200,000. Factory overhead is applied on the basis of $ 8 per direct labor hour. REQUIRED: a]. Prime Cost
On October 1, the Florida Company had the following inventories:
Materials, $ 24,000;
work in process, $ 12,000; and
finished goods, $ 36,000.
During the month, materials purchases totaled $ 56,000. Direct labor for October was $40,000, at a uniform wage of $ 6.40 per hour (Total Labour Hour = 6250). Marketing and administrative expenses for the month amounted to 10% of net sales.
Inventories on October 31 were as follows:
Materials, $ 20,000;
Work in process, $ 8,000; and
Finished goods, $ 40,000.
Net sales for October totaled $ 200,000. Factory overhead is applied on the basis of $ 8 per direct labor hour.
REQUIRED:
a]. Prime Cost
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