The Duggart Company Had the Following Transactions and Events During

question 112

Essay

The Duggart Company had the following transactions and events during its first year of operations. Estimated overhead for the year was $770,000; estimated direct labor cost for the year was $350,000.
1. Purchased materials on account, $567,000.
2. Requisitioned materials for production as follows: direct materials - 85 percent of purchases, indirect materials - 12 percent of purchases.
3. Direct labor for production is $331,000, indirect labor is $125,000.
4. Overhead incurred (not including materials or labor): $529,000.
5. Overhead is applied to production based on direct labor cost at the rate of ________.
6. Goods costing $976,000 were completed during the period.
7. Goods costing $513,200 were sold on account for $776,000.
Required:
Determine the ending balances for:
(a) Materials Inventory
(b) Work-in-Process Inventory
(c) Finished Goods Inventory

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Definitions:

Production Function

An equation representing the relationship between inputs used in production and the output produced from these inputs.

Labor

The physical and mental effort used in the production of goods and services, often considered a primary factor of production.

Machines

Tools or devices designed to perform specific tasks or functions, often powered by electricity or mechanical force.

Total Cost

The aggregate expenditure involved in producing a set quantity of goods or services, including both fixed and variable costs.