On October 1, the Florida Company had the following inventories:
Materials,$ 24,000;
work in process,$ 12,000; and
finished goods,$ 35,000.
During the month, materials purchases totaled $ 56,000. Direct labor for October was $40,000, at a uniform wage of $ 6.40 per hour.(Total Labour Hour = 6250)Marketing and administrative expenses for the month amounted to 10% of net sales.
Inventories on October 31 were as follows:
Materials,$ 20,000;
Work in process,$ 8,000; and
Finished goods,$ 40,000.
Net sales for October totaled $ 200,000. Factory overhead is applied on the basis of $ 8 per direct labor hour.
REQUIRED:
iv]. Conversion Cost
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