The Virginia Company is a manufacturing firm. The following data relate to the month of March: (1) Total manufacturing cost incurred during the month was $100,000, (2) Cost of goods manufactured was $90,000, (3) Factory overhead was $20,000 which is equal to 40% of direct labor costs, ( 4) Work-in-process at the beginning of the month was 80% of work-in-process at the end of the month. Required: Determine direct materials usage during the month. Determine the beginning and ending work-in-process.

The Virginia Company

a. Direct materials usage during the month:

= $22,000

b. Beginning work-in-process:

= $8,000

C. Ending work-in-process:

= $10,000

Explanation:

a) Data and Calculations:

Total manufacturing cost incurred during the month was $100,000

Factory overhead = $20,000

Direct labor = $50,000 ($20,000/40%)

Cost of goods manufactured was $90,000

Ending work-in-process = $10,000 ($100,000 - $90,000)

Beginning work-in-process = $8,000 ($10,000 * 80%)

Direct materials = $22,000 ($100,000 - $8,000 - $20,000 - $50,000)

Beginning work-in-process     $8,000

Factory overhead                    20,000

Direct labor                              50,000

Direct materials                       22,000

Total manufacturing costs     100,000

less Ending work-in-process   10,000

Cost of goods manufactured 90,000

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