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Ron Williams recently took over as the controller of Johnson Brothers Manufacturing. Last month, the previous controller left the company with little notice and left the accounting records in disarray. Ron needs the ending inventory balances to report first quarter numbers.
For the previous month (March 2011) Ron was able to piece together the following information:
Calculate 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
Provide her with the specific information the standard quantity of material allowed for November production
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Determining appropriate product costs is essential to reporting a reliable inventory valuation. Fraud examiners have indicated that scams that involve product costs and expenses are relatively easy to detect.
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