Missing records, computing inventory costs. Ron Williams recently took over as the controller of Johnson Brothers Manufacturing. Last month, the previous controller left the company with little notice and left the accounting records in disarray. Ron needs the ending inventory balances to report first quarter numbers.
For the previous month (March 2011) Ron was able to piece together the following information:
|
Direct materials purchased |
$ 240,000 |
|
Work in process inventory, 3/1/2011 |
$ 70,000 |
|
Direct materials inventory, 3/1/2011 |
$ 25,000 |
|
Finished goods inventory, 3/1/2011 |
$ 320,000 |
|
Conversion Costs |
$ 660,000 |
|
Total manufacturing costs added during the period |
$ 840,000 |
|
Cost of goods manufactured |
4 times direct materials used |
|
Gross margin as a percentage of revenues |
20% |
|
Revenues |
$1,037,500 |
Required Calculate the cost of:
1. Finished goods inventory, 3/31/2011
2. Work in process inventory, 3/31/2011
3. Direct materials inventory, 3/31/2011