Martin Enterprises Uses Three Operations in Sequence to Manufacture an Assortment

question 86

Essay

Martin Enterprises uses three operations in sequence to manufacture an assortment of flower pots. In each operation, the same procedures, time, and costs are used to perform that operation, regardless of the type of pot being produced. During March, a batch of 500 Clay Pots and a batch of 800 Porcelain Pots were put through the first operation. All materials for a batch are introduced at the beginning of the operation for that batch. The costs shown below were incurred in March for the first operation:
$\begin{array}{llr} \text {Direct Labor } &\$4,450\\ \text { Manufacturing Overhead } &3,600\\ \text { Direct Materials: } &\\ \text { Clay Pots} &\$1,200\\ \text {Porcelain Pots } &\$ 2,400\\\end{array}$

There were no inventories at the beginning of the month; 400 units of Clay Pots and 600 units of Porcelain Pots were transferred to the next operation. The ending inventories were 30% and 60% complete for Clay and Porcelain, respectively.
Required:
What is the total cost of the ending inventory in process for operation #1?

---

Definitions:

Debt

An amount of money borrowed by one party from another, under the condition that it is to be paid back at a later date, usually with interest.

Financial Leverage

Financial leverage describes the use of borrowed funds to increase the potential return of an investment.

Liabilities

Financial obligations or debts owed by a company to creditors or suppliers, which must be settled over time.

Posting

the process of transferring journal entries to respective accounts in the ledger.