Balance Sheet question

[CVHuguley]

I have a question that I hope someone can help me with:

Kansas Plating Company reported a cost of goods manufactured of $260,000 with the firm's year-end balance sheet revealing work in process and finished goods of $35,000 and $67,000, respectively. If supplemental information disclosed raw materials used in production of $40,000, direct labor of $70,000, and manufacturing overhead of $120,000, the compnay's beginning work in process mush have been:

a) $5,000
b) $37,000
c) $65,000
d) $97,000
e) some other amount

The answer isn't $65,000

 

[Super I]

Are you sure you have no additional information in the problem that you accidently left out.. maybe something given in an earlier question about beginning balances or CGS for the same company?

 

[CVHuguley]

This is what I'm given.

 

[bigwilly]

D; 97,000. I got, but not sure if its correct.

 

[Super I]

I can't see how the answer isn't C. Besides the fact that we KNOW that C is correct whenever we're in doubt, Cost of goods mfg'rd is calculated as:

Beginning WIP + Manufacturing costs for period - Ending WIP = CGM

X + (40+70+120) - 35 = 260

X + 230 -35 =260

X=65

If there is no explanation supporting a different answer it might just be a typo in the text. Where is this from? Have you checked to see if there is an errata sheet for the book this came from?

 

[killamanjaro]

$65,000



Edited 1 time(s). Last edit at Friday, September 8, 2006 at 06:15PM by killamanjaro.

 

[CVHuguley]

Super I,

You're correct. The answer is $65,000. I got further clarification. I shouldn't have said that the answer wasn't $65,000. Thanks for your help.