Required information IThe following information applies to t

Required information IThe following information applies to the questions displayed below.] Bodin Company manufactures finger splints for kids who get tendonitis from playing video games. The firm had the following inventories at the beginning and end of the month of January. January 31 Finished goods Work in process Raw material January 1 $125,000 233,000 117,000 132,000251, 000 124,000 The following additional data pertain to January operations. Raw material purchased Direct labor Actual manufacturing overhead Actual selling and administrative expenses $190,000 350,000 170,000 115,000 The company applies manufacturing overhead at the rate of 60 percent of direct-labor cost. Any overapplied or underapplied manufacturing overhead is accumulated until the end of the year.

Solution

Answer

Detail

Net

Direct Material Cost

Opening Stock of Raw Material

           132,000

Add: Material Purchased

           190,000

Less: Closing Raw Material

           124,000

Raw Material Consumed

           198,000

Add: Direct Labor Cost

           350,000

Prime Cost

           548,000

There are no Direct Expenses in the question; otherwise Direct Expenses are also added while calculating Prime Cost.

	Detail	Net
Direct Material Cost
Opening Stock of Raw Material	132,000
Add: Material Purchased	190,000
Less: Closing Raw Material	124,000
Raw Material Consumed		198,000
Add: Direct Labor Cost		350,000
Prime Cost		548,000