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General Accounting Discussions: Finding Direct materials used in production? Help please new to accounting

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    • CommentAuthorgrendel67
    • CommentTime3 days ago
     
    Hi everyone I new to accounting tring to learn doing practice problems I can't figure out how they are finding the total of Direct materials used in production for the year with the info provided.

    Killian Company began operations on January 1, 2001. The predetermined overhead rate for 2001 was computed to be $6.00 per direct labor hour. Debits to Work in Process for the year totaled $550,000; credits to Work in Process totaled $480,000, which represents the cost of the goods manufactured for the year. Analysis of the Company’s records indicate that direct labor cost totaled $250,000 for the year, which represents 20,000 hours of direct labor time.
    • CommentAuthormomma4_5
    • CommentTime3 days ago
     
    Does the problem say anything about the amount of direct materials used or the amount of factory overhead that has been put into WIP???
    • CommentAuthorgrendel67
    • CommentTime3 days ago
     
    No it doesn't it gives anseers you could choose from but the information in the question is what is to be used to figure the answer.
    • CommentAuthormomma4_5
    • CommentTime3 days ago edited
     
    Okay, I think that I have it.

    the D/M should be 180,000 and I think I will show you the J/E here.


    (debit) Work in Process 550,000
    (credit)D/L 250,000 (number given)
    (credit)F/O 120,000 (20,000 units x $6)
    (credit)D/M 180,000 (plug in for what's left)

    do you understand this??? I am thinking that this is right... Good luck.

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