You are the accountant for Sakuraba, who is very angry. Figure out his books for him or he might have to beat you. Sakuraba wants to know:
1.The cost of materials used, Cost of Goods Manufactured, and Cost of Goods Sold during the month.
2.The cost of ending inventory for Raw Materials, Work in Process, and Finished Goods.
Sakuraba has told you the following and will say nothing more:
1.To make paper airplanes, I buy sheets of paper costing $1/sheet and store them in the Materials Dept.I make all purchases on credit.To begin production, the Factory requisitions sheets of paper from the Materials Dept.Labor is added at $2/hour to turn the sheets of paper into paper airplanes.Completed paper airplanes are transferred to the Sales Room floor where they are sold.
2.At the beginning of the month, there are no paper airplanes or sheets of paper in the Factory or Sales Room floor.There are 2 sheets of paper in the Materials Dept.
3.During the month 2 sheets of paper are purchased, 3 sheets are transferred to the Factory, 2 paper airplanes, a standard and box-nose, are completed and transferred to the Sales Room floor, and the box nose airplane is sold.
4.The standard plane took ½ hour to complete and the box nose took 1 hour to complete.The airplane remaining in the Factory has been worked on for ½ hour.
5.Assume that Sakuraba applies MOH to production based on DLHs.He estimated MOH of $15 and DLHs of 5 for the period.
Required: Determine CGM and CGS. Also, determine the ending balance for RM, WIP, and FG.