Question 1 (10 points) Ecco Company manufactures quality gentlemen\'s clothing.

Question

Question 1 (10 points) Ecco Company manufactures quality gentlemen's clothing. The following selected financial information for the fiscal year 2018 is provided: Item Amount $100,000 75,000 25,000 10,000 30,000 15,000 10,000 Sales Cost of Goods Manufactured Direct Material Purchased Factory Overhead Work in Process-January 1 Work in Process-December 31 Direct Material December 31 Finished Goods Inventory - 60,000 December 31 15,000 30,000 55,000 Net Income Direct Materials used Cost of Goods Sold Use this information to determine the dollar amount of Ecco's Direct Material Inventory for January 1, 2018.

Explanation / Answer

Solution:

Beginning inventory = Ending inventory - Material purchased + Material used

= $10,000 - $25,000 + $30,000

= $15,000

Hence, Direct Material Inventory for Jan 1 = $15,000

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