Evaluate the cost of finished goods inventory

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Reference no: EM135599

Ron Williams currently took over as the controller of Johnson Brothers Manufacturing. Last month, the last controller left the company with little notice and left the accounting records in disarray. Ron requires the ending inventory balances to report first quarter numbers.

For the last month (March 2011) Ron was able to piece together the subsequent information:

Direct materials purchased $ 240,000

Work-in-process inventory, 3/1/2011 $ 70,000

Direct materials inventory, 3/1/2011 $ 25,000

Finished goods inventory, 3/1/2011 $ 320,000

Conversion Costs $ 660,000

Total manufacturing costs added during the period $ 840,000

Cost of goods manufactured: 4 times direct materials used

Gross margin as a percentage of revenues 20%

Revenues $1,037,500

Evaluate the cost of:

1. Finished goods inventory, 3/31/2011

2. Work-in-process inventory, 3/31/2011

3. Direct materials inventory, 3/31/2011

Reference no: EM135599

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