Question & Answer: Salamone Heaters' selected data for October 2013 are presented here (in millions): Calculate the following costs: Direct materials inventory,…..

2-26 Flow of Inventoriable Costs. Salamone Heaters selected data for October 2013 are presented here (in millions): Direct materials inventory, 10/1/2013 Direct materials purchased Direct materials used Total manufacturing overhead costs Variable manufacturing overhead costs Total manufacturing costs incurred during October 2013 Work-in-process inventory, 10/1/2013 Cost of goods manufactured Finished goods inventory, 10/1/2013 Cost of goods sold $ 75 335 380 495 260 1,580 215 1,650 165 1,760 Calculate the following costs: Re 1. Direct materials inventory, 10/31/2013 2. Fixed manufacturing overhead costs for October 2013 3. Direct manufacturing labor costs for October 2013 4. Work-in-process inventory, 10/31/2013 5. Cost of finished goods available for sale in October 2013 6. Finished goods inventory, 10/31/2013

Salamone Heaters’ selected data for October 2013 are presented here (in millions): Calculate the following costs: Direct materials inventory, 10/31/2013 Fixed manufacturing overhead costs for October 2013 Direct manufacturing labor costs for October 2013 Work-in-process inventory, 10/31/2013 Cost of finished goods available for sale in October 2013 Finished goods inventory, 10/31/2013

Expert Answer

Solution:

1.	Direct materials inventory 10/31/2013 = $ 30

2.	Fixed manufacturing overhead costs for October 2013 = $ 235

3.	Direct manufacturing labor costs for October 2013 = $ 705

4.	Work-in-process inventory 10/31/2013 = $ 145

5.	Cost of finished goods available for sale in October 2013 = $ 1,815

6.	Finished goods inventory 10/31/2013 = $ 55

Working Notes:

1.	Direct materials inventory 10/31/2013	$30
		$
	Direct materials inventory 10/1/2013	75	a
Add:	Direct materials purchased	335	b
	Direct materials available for production	410	c=a+b
Less:	Direct materials used	380	d
	Direct materials inventory 10/31/2013	30	e=c-d


2.	Fixed manufacturing overhead costs for October 2013		$235

	Total manufacturing overhead costs		$495
Less:	Variable manufacturing overhead costs		$260
	Fixed manufacturing overhead costs for October 2013		$235

3.	Direct manufacturing labor costs for October 2013		$705

	Total manufacturing costs		1,580
Less:	Direct materials used		380
Less:	Total manufacturing overhead costs		495
	Direct manufacturing labor costs for October 2013		705

4.	Work-in-process inventory 10/31/2013	$145

	Work-in-process inventory 10/1/2013	215
Add:	Total manufacturing costs	1,580
	Work-in-process available for production	1,795
Less:	Cost of goods manufactured	1,650
	Work-in-process inventory 10/31/2013	145

5.	Cost of finished goods available for sale in October 2013		$1,815

	Finished goods inventory 10/1/2013		$165
Add:	Cost of goods manufactured		$1,650
	Cost of finished goods available for sale in October 2013		$1,815

6.	Finished goods inventory 10/31/2013	$55

	Finished goods available for sale in October 2013		$1,815
Less:	Cost of goods sold		$1,760
	Finished goods inventory 10/31/2013		$55

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