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ACCT 386 - Week 2 - Homework - Question 2

ACCT 386 - Week 2 - Homework - Question 2
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ACCT 386 - Week 2 - Homework - Question 2

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Question 2

Valenko Company provided the following account balances for the year ended December 31 (all raw materials are used in production as direct materials):

  

 

 

  Selling expenses

$

212,000  

  Purchases of raw materials

$

263,000  

  Direct labor

 

?

  Administrative expenses

$

150,000  

  Manufacturing overhead applied to work in process

$

337,000  

  Total actual manufacturing overhead costs

$

356,000  


Inventory balances at the beginning and end of the year were as follows:

  

Beginning of Year

End of Year

  Raw materials

$

60,000

 

$

36,000

 

  Work in process

 

?

 

$

28,000

 

  Finished goods

$

31,000

 

 

?

 


The total manufacturing costs for the year were $670,000; the cost of goods available for sale totaled $730,000; the unadjusted cost of goods sold totaled $661,000; and the net operating income was $39,000. The company’s overapplied or underapplied overhead is closed entirely to cost of goods sold.