The following events took place for Migliozzi Inc. during July, the first month of operations as a producer of road bikes: • Purchased $397,940 of materials • Used $343,700 of direct materials in production • Incurred $290,100 of direct labor wages • Applied factory overhead at a rate of 80% of direct labor cost • Transferred $813,970 of work in process to finished goods • Sold goods with a cost of $799,480 • Sold goods for $1,405,850 • Incurred $319,590 of selling expenses • Incurred $125,080 of administrative expenses
The following events took place for Migliozzi Inc. during July, the first month of operations as a producer of road bikes: • Purchased $397,940 of materials • Used $343,700 of direct materials in production • Incurred $290,100 of direct labor wages • Applied factory overhead at a rate of 80% of direct labor cost • Transferred $813,970 of work in process to finished goods • Sold goods with a cost of $799,480 • Sold goods for $1,405,850 • Incurred $319,590 of selling expenses • Incurred $125,080 of administrative expenses
Chapter5: Process Costing
Section: Chapter Questions
Problem 11MC: Beginning inventory and direct material cost added during the month total $55,000. What is the value...
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The following events took place for Migliozzi Inc. during July, the first month of operations as a producer of road bikes:
• | Purchased $397,940 of materials |
• | Used $343,700 of direct materials in production |
• | Incurred $290,100 of direct labor wages |
• | Applied factory overhead at a rate of 80% of direct labor cost |
• | Transferred $813,970 of work in process to finished goods |
• | Sold goods with a cost of $799,480 |
• | Sold goods for $1,405,850 |
• | Incurred $319,590 of selling expenses |
• | Incurred $125,080 of administrative expenses |
Required:
a. | Prepare the July income statement for Migliozzi. Assume that Migliozzi uses the perpetual inventory method. Enter amounts as positive numbers unless the amount is a calculation that results in a negative amount. For example: Net loss should be negative. Expenses should be positive. |
b. | Determine the inventory balances at the end of the first month of operations. |
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