Partially completed T-accounts and additional information for Cardinals, Inc., for the month of November appear as follows. Materials Inventory BB (11/1) 30,000 120,000 96,000 Work-In-Process Inventory BB (11/1) 60,000 Labor 90,000 Finished Goods Inventory BB (11/1) 80,000 180,000 120,000 Cost of Goods Sold Manufacturing Overhead Control 78,000 Applied Manufacturing Overhead Additional information for November follows: Labor wage rate was $30 per hour. Manufacturing overhead is applied at $24 per direct labor-hour. During the month, sales revenue was $270,000, and selling and administrative costs were $48,000. This company has no indirect materials or supplies. Required: a. What cost amount of direct materials was issued to production during November? b. How much manufacturing overhead was applied to products during November? c. What was the cost of products completed during November? d. What was the balance of the Work-in-Process Inventory account at the end of November? e. What was the over- or underapplied manufacturing overhead for November? f. What was the operating profit (loss) for November? Any over- or underapplied overhead is written off to Cost of Goods Sold.

Cardinals, Inc.

a) Cost of direct materials issued to production during November = $54,000.

b) Total manufacturing overhead applied during November = $72,000.

c) Cost of products completed during November = $180,000

d) Ending balance of WIP = $96,000

e) Underapplied manufacturing overhead = $6,000

f) Operating profit (loss) for November:

Sales Revenue                             $270,000

Cost of goods sold       140,000

Underapplied overhead  6,000   (146,000)

Operating profit                           $124,000

Explanation:

a) Data and Calculations:

1. Materials Inventory

Beginning balance 11/1  $30,000

Purchases                      120,000

less ending balance       96,000

Transfer to WIP            $54,000

2. Work-In-Process Inventory

Beginning balance 11/1   $60,000

Labor                                 90,000

Materials                           54,000

Manufacturing overhead 72,000

Less Finished Goods    (180,000)

Ending WIP                      96,000

3. Finished Goods Inventory

Beginning balance 11/1  $80,000

WIP                                 180,000

Ending balance            (120,000)

Cost of goods sold       140,000

4. Manufacturing Overhead Control $78,000

   Manufacturing overhead applied    72,000

   Under-applied overhead                 $6,000

5. Labor hours = $90,000/$30 = 3,000 hours

6. Manufacturing overhead applied = $24 * 3,000 = $72,000