A tornado struck the only manufacturing plant of Toledo Farm Implements (TFI) on June 1. All work-in-process inventory was destroyed, but a few records were salvaged from the wreckage and from the company's headquarters. If acceptable documentation is provided, the loss will be covered by insurance. The insurable value of work-in-process inventory consists of direct materials, direct labor, and applied overhead.
The following information about the plant appears on the April financial statements at the company's downtown headquarters:
|
|
|
|
Materials inventory, April 30 |
$ |
98,000 |
|
Work-in-process inventory, April 30 |
|
172,400 |
|
Finished goods inventory, April 30 |
|
64,000 |
|
Cost of goods sold through April 30 |
|
697,200 |
|
Accounts payable (materials suppliers), April 30 |
|
43,200 |
|
Manufacturing overhead through April 30 |
|
369,800 |
|
Payroll payable, April 30 |
|
0 |
|
Withholding and other payroll liabilities, April 30 |
|
19,400 |
|
Overhead applied through April 30 |
|
359,200 |
|
|
A count of the inventories on hand May 31 shows the following:
|
|
|
|
Materials inventory |
$ |
86,000 |
|
Work-in-process inventory |
|
? |
|
Finished goods inventory |
|
75,000 |
|
|
The accounts payable clerk tells you that outstanding bills to suppliers totaled $100,200 and that cash payments of $75,800 were made to them during the month. She informs you that the payroll costs last month for the manufacturing section included $164,800, of which $29,400 was indirect labor.
At the end of May, the following balances were available from the main office:
|
|
|
|
Manufacturing overhead through May 31 |
$ |
434,000 |
|
Cost of goods sold through May 31 |
|
793,200 |
|
|
Recall that each month there is only one requisition for indirect materials. Among the fragments of paper, you located the following information, which you have neatly typed for your records:
From scrap found under desk: indirect materials → $4,172
You also learn that the overhead during the month was overapplied by $2,400.
Required:
Determine the cost of the work-in-process inventory lost in the disaster.