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Survey of Accounting (Accounting I)

8th Edition
Carl Warren
ISBN: 9781305961883

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BuyFindarrow_forward

Survey of Accounting (Accounting I)

8th Edition
Carl Warren
ISBN: 9781305961883
Textbook Problem

Amounts for materials
Big Timber Furniture Company manufactures furniture. Big Timber Furniture uses a job order cost system. Balances on June 1 from the materials ledger are as follows:

The materials purchased during June are summarized from the receiving reports as follows:

Materials were requisitioned to individual jobs as follows:

The glue is not a significant cost, so it is treated as indirect materials (factory overhead).

a.Determine the total purchase of materials in June.
b.Determine the amounts of materials transferred to Work in Process and Factory Overhead during June.
c.Determine the June 30 balances that would be shown in the materials ledger accounts.

To determine

(a)

Concept Introduction:

Work is process (WIP) is the stock between the raw material and finished goods. WIP is the stock which is in the process of production.So, it is no more a part of raw material stock.

To compute:

The total material purchased in June.

Explanation

Total material purchase includes all the direct and indirect cost. So, the calculation of total purchased cost is as follows:-

  Total purchased cost=Fabric cost+Polyester filling+Lumberx

To determine

(b)

Concept Introduction:

Work is process (WIP) is the stock between the raw material and finished goods. WIP is the stock which is in the process of production. So, it is no more a part of raw material stock.

To compute:

The amounts of materials transferred to work in process and factory overhead in the month of June.

To determine

(c)

Concept Introduction:

Material ledgeraccounts are maintained for controlling purpose. Separate ledgers are maintained for different materials. The materials which are received or issued based on supplier invoice and requisition issued respectively are going through this ledger.

To calculate:

The material ledger account balances for the month of June.

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