Reference no: EM132569135

On January 31, a snowstorm damaged the office of a small business, and some of the accounting information stored in the computer's memory was lost. The following information pertaining to January activities was retrieved from other sources:

Direct materials purchased                          $18,000

Work in process-beginning inventory              2,000

Direct materials-beginning inventory             6,000

Direct materials-ending inventory              10,000

Finished goods-beginning inventory           12,000

Finished goods-ending inventory                  2,500

Sales                                                       60,000

Manufacturing overhead and direct labour incurred  22,000

Gross profit percentage based on net sales                 40%

Instructions

Question a. What was the cost of direct materials used in January?

Question b. What amount of work in process inventory was transferred out to finished goods during January?

Question c. Assume that $20,000 of direct materials was used in January and that the cost of goods available for sale in January amounted to $40,000. What did the ending work in process inventory amount to?