The following data have been taken from the accounting recor

The following data have been taken from the accounting records of Watson Corporation for the previous year.

Sales........................................................................

$880

Raw materials inventory, beginning.......................

$20

Raw materials inventory, ending............................

$30

Purchases of raw materials......................................

$150

Direct labor.............................................................

$180

Manufacturing overhead applied............................

$230

Manufacturing overhead expenses.........................

$150

Administrative expenses.........................................

$100

Selling expenses......................................................

$130

Work in process inventory, beginning....................

$80

Work in process inventory, ending.........................

$30

Finished goods inventory, beginning......................

$120

Finished goods inventory, ending..........................

$100

Use these data to answer the following series of questions.

1. The cost of the raw materials used in production during the year (in thousands of dollars) was:

  

  2.    The cost of goods manufactured (finished) for the year (in thousands of dollars) was:

  3.    The cost of goods sold for the year (in thousands of dollars) was:

720

4. The difference between actual and applied overhead is__________ which _________ cost of goods sold:

	Sales........................................................................	$880
	Raw materials inventory, beginning.......................	$20
	Raw materials inventory, ending............................	$30
	Purchases of raw materials......................................	$150
	Direct labor.............................................................	$180
	Manufacturing overhead applied............................	$230
	Manufacturing overhead expenses.........................	$150
	Administrative expenses.........................................	$100
	Selling expenses......................................................	$130
	Work in process inventory, beginning....................	$80
	Work in process inventory, ending.........................	$30
	Finished goods inventory, beginning......................	$120
	Finished goods inventory, ending..........................	$100

Solution

1) Raw materials used in production Raw materials inventory,beginning 20 purchases of raw materials 150 total cost of goods available 170 Raw materials inventory,ending -30 Raw materials used in production 140 answer 2) cost of goods manufactured Direct materials used 140 Direct labor 180 Manufacturing overhead applied 230 total manufacturing cost 550 Add work in process ,beginning 80 less work in process,ending -30 cost of goods manufactured 600 3) Cost of goods sold finished goods inventory,beginning 120 cost of goods manufactured 600 finished goods inventory, ending -100 Cost of goods sold 620 4) $80 overapplied ; overstates