Response to the following problem:
O'Reilly Manufacturing, Inc.'s cost of goods sold for the month ended July 31 was $345,000. The ending work in process inventory was 90% of the beginning work in process inventory. Factory overhead was 50% of the direct labor cost. Other information pertaining to O'Reilly's inventories and production for the month of July is as follows:
Beginning inventories, July 1:
Direct materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 20,000
Work in process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40,000
Finished goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102,000
Purchases of direct materials during July . . . . . . . . . . . . . . . . . . . 110,000
Ending inventories, July 31:
Direct materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26,000
Work in process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ?
Finished goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105,000
Required:
1. Prepare a statement of cost of goods manufactured for the month of July.
2. Prepare a schedule to compute the prime cost incurred during July.
3. Prepare a schedule to compute the conversion cost charged to Work in Process during July.