Shapes Arränge quik Styles Paragraph Drawing Problem The following data refers t

Question

Shapes Arränge quik Styles Paragraph Drawing Problem The following data refers to one year Direct materials inventory, Jan 1 Direct materials inventory, Dec 31 Work-in-process inventory Jan 1 Work-in-process inventory, Dec 31 Finished Goods inventory, Jan 1 Finished Goods inventory, Dec 31 Purchases of direct materials Cost of goods manufactured during the year Total manufacturing costs Cost of goods sold Gross margin Direct labor Direct materials used a. $8,200 5,400 7,600 3.800 600 32,200 108,900 112,100 94,500 C. 29.200 27,600 Sales Revenue Notes

Explanation / Answer

Solution :

a. Direct material inventory, Jan1:

Direct material inventory Jan1 + Purchases of direct material - Direct material inventory Dec 31 = Direct material used

Direct material inventory Jan1 + $32,200 - $8,200 = $29,200

Direct material inventory Jan1 = $29,200 + $8,200 - $32,200 = $5,200

b. Total manufacturing cost:

Total manufacturing cost = Cost of goods manufactured during the year + Work in process inventory Dec 31

= $108,900 + $7,600 = $116,500

c. Direct labor:

Direct labor = Total manufacturing cost - Work In Process inventory Jan 1 - Direct material used - Manufacturing overhead

= $116,500 - $5,400 - $29,200 - $27,600 = $54,300

d. Sales Revenue:

Sales revenue = Cost of goods sold + Gross Profit = $112,100 + $94,500 = $206,600

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