Mason Industries Restarted Operations on September 1 After a 3-Month

question 12

Essay

Mason Industries restarted operations on September 1 after a 3-month shutdown. There were no beginning inventories. The following operations data are available for September and the one product the company refines:
$$\begin{array} { l r } & \text { Gallons } \\\text { Beginning inventory }& - 0- \\\text { Started in September } & 450,000 \\\text { Ending work-in-process inventory (70\% complete) } & 15,000 \\ \text { Cost incurred in July were: } & \\\text { Materials }& \$ 560,000 \\\text { Labor } &164,300 \\\text { Manufacturing overhead } &242,350\end{array}$$


All production at Mason is sold immediately.
Required:
(a) Compute cost of goods sold for September.
(b) What is the value of the work-in-process inventory on September 30?

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Definitions:

Producer Surplus

The difference between the amount producers are willing to accept for a good or service versus what they actually receive, usually measured above the supply curve up to the price level.

Price Ceiling

A legally established maximum price for a good or service, beyond which it cannot be sold.

Consumer Surplus

The difference between what consumers are willing to pay for a good or service and what they actually pay, representing their gained utility.

Supply Shift

A change in the quantity of a product or service that producers are willing and able to sell at all prices, due to factors like technology, production costs, or number of sellers.