The Lakeview Corporation Had the Following Account Balances

question 83

Essay

The Lakeview Corporation had the following account balances:

Raw Material	Manufacturing Overhead		?			385,000		?
Bal. 1/1	30,000
	420,000
Bal. 12/31	60,000

Work in Process	Factory Wages Payable
Bal. 1/1 Direct material	70,000  320,000		810,000			179,000	Bal.1/1	10,000  175,000
Direct labor	11,000
Overhead	400,000						Bal. 12/31	6,000
Bal. 12/31	?

Finished Goods	Cost of Goods Sold		?		?
Bal. 1/1	40,000
	?
Bal. 12/31	130,000

Required:
a.What was the cost of raw material put into production during the year?
b.How much of the material from question 1 consisted of indirect material?
c.How much of the factory labor cost for the year consisted of indirect labor?
d.What was the cost of goods manufactured for the year?
e.What was the cost of goods sold for the year (before considering under- or overapplied overhead)?
f.If overhead is applied to production on the basis of direct material, what rate was in effect during the year?
g.Was manufacturing overhead under- or overapplied? By how much?
h.Compute the ending balance in the Work in Process Inventory account. Assume that this balance consists entirely of goods started during the year. If $32,000 of this balance is direct material cost, how much of it is direct labor cost? Manufacturing overhead cost?

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Definitions:

Strip Bond

A bond that has had its coupon payments and principal repayment separated, creating zero-coupon securities from a regular bond.

Yield to Maturity

The total return anticipated on a bond if the bond is held until its maturity date, taking into account both interest payments and capital gain or loss.

Term to Maturity

The remaining time until a debt instrument, such as a bond or loan, reaches its due date and the principal must be repaid.

Priced

Determination of the value or amount that must be paid to acquire a good, service, or asset.