To follow is selected financial data from Harmon Manufacturing for the most recent year. $\begin{array}{|l|cc|}
\hline \text { Ending raw materials inventory } & \$ & 19,000 \
\hline \text { Ending work in process inventory } & \$ & 42,000 \
\hline \text { Ending finished goods inventory } & \$ & 54,100 \
\hline \begin{array}{l}
\text { Amount of underallocated manufacturing } \
\text { overhead }
\end{array} & \$ & 3,100 \
\hline \text { Cost of goods sold for year } & \$ & 81,000 \
\hline \text { Cost of raw materials purchased during year } & \$ & 45,300 \
\hline \text { Cost of direct materials requisitioned during year } & \$ & 41,700 \
\hline \begin{array}{l}
\text { Cost of indirect materials requisitioned during } \
\text { year }
\end{array} & \$ & 7,100 \
\hline \text { Cost of goods completed during year } & \$ & 110,000 \
\hline \text { Manufacturing overhead allocated } & \$ & 60,000 \
\hline \text { Manufacturing overhead \% of direct labor cost } & & 125 \% \
\hline
\end{array}$

-What is the beginning finished goods inventory?

Question

To follow is selected financial data from Harmon Manufacturing for the most recent year. $\begin{array}{|l|cc|}
\hline \text { Ending raw materials inventory } & \$ & 19,000 \
\hline \text { Ending work in process inventory } & \$ & 42,000 \
\hline \text { Ending finished goods inventory } & \$ & 54,100 \
\hline \begin{array}{l}
\text { Amount of underallocated manufacturing } \
\text { overhead }
\end{array} & \$ & 3,100 \
\hline \text { Cost of goods sold for year } & \$ & 81,000 \
\hline \text { Cost of raw materials purchased during year } & \$ & 45,300 \
\hline \text { Cost of direct materials requisitioned during year } & \$ & 41,700 \
\hline \begin{array}{l}
\text { Cost of indirect materials requisitioned during } \
\text { year }
\end{array} & \$ & 7,100 \
\hline \text { Cost of goods completed during year } & \$ & 110,000 \
\hline \text { Manufacturing overhead allocated } & \$ & 60,000 \
\hline \text { Manufacturing overhead \% of direct labor cost } & & 125 \% \
\hline
\end{array}$
 
-What is the beginning finished goods inventory?

Quizplus · Accepted Answer

Beginning Finished Goods Inventory = Ending Finished Goods Inventory + Cost of Goods Sold - Cost of Goods Manufactured
We are given the Ending Finished Goods Inventory and the Cost of Goods Sold, but we need to calculate the Cost of Goods Manufactured.
Cost of Goods Manufactured is calculated as follows:
Cost of Goods Manufactured = Total Manufacturing Costs + Beginning Work in Process Inventory - Ending Work in Process Inventory
We are not given the Beginning Work in Process Inventory directly, but we can calculate Total Manufacturing Costs using the data provided:
Total Manufacturing Costs = Cost of Direct Materials Requisitioned + Direct Labor Cost + Manufacturing Overhead Allocated
We are given the Cost of Direct Materials Requisitioned and the Manufacturing Overhead Allocated, but not the Direct Labor Cost. However, we know that Manufacturing Overhead is 125% of Direct Labor Cost. Therefore, we can calculate Direct Labor Cost as follows:
Manufacturing Overhead Allocated = 125% of Direct Labor Cost
60,000 = 1.25 * Direct Labor Cost
Direct Labor Cost = 60,000 / 1.25
Direct Labor Cost = 48,000
Now we can calculate Total Manufacturing Costs:
Total Manufacturing Costs = 41,700 (Direct Materials) + 48,000 (Direct Labor) + 60,000 (Overhead)
Total Manufacturing Costs = 149,700
We still need the Beginning Work in Process Inventory, which we don't have. However, we can use the Cost of Goods Completed to find it:
Cost of Goods Completed = Total Manufacturing Costs + Beginning Work in Process Inventory - Ending Work in Process Inventory
110,000 = 149,700 + Beginning Work in Process Inventory - 42,000
Beginning Work in Process Inventory = 110,000 - 149,700 + 42,000
Beginning Work in Process Inventory = 2,300
Now we can calculate the Cost of Goods Manufactured:
Cost of Goods Manufactured = 149,700 + 2,300 - 42,000
Cost of Goods Manufactured = 110,000
Finally, we can calculate the Beginning Finished Goods Inventory:
Beginning Finished Goods Inventory = Ending Finished Goods Inventory + Cost of Goods Sold - Cost of Goods Manufactured
Beginning Finished Goods Inventory = 54,100 + 81,000 - 110,000
Beginning Finished Goods Inventory = 25,100
Therefore, the correct answer is C) $25,100.

To Follow Is Selected Financial Data from Harmon Manufacturing for the Most