Selected data concerning operations of Cascade Manufacturing Company for the pas

Question

Selected data concerning operations of Cascade Manufacturing Company for the past fiscal year follow: Raw materials used - $400,000 Total manufacturing costs charged to production during the year (includes raw material, direct labor, and manufacturing overhead applied at a rate of 60% of direct labor costs) - $731,000 Costs of goods available for sale - $876,000 Selling and general expenses - $40,000 Beginning Ending Raw materials $70,000 80,000 Work-in-progress 85,000 30,000 Finished goods 90,000 110,000 Determine each of the following: a. Cost of raw materials purchased b. Direct labor costs charged to production c. Cost of goods manufactured d. Cost of goods sold

Explanation / Answer

a. Opening balance + Purchased - closing balance = Raw material used

70000 + purchased - 80000 = 400000

Purchased = 410000

b. Total manufacturing cost caharged to production = 731000

Dr. material + Dr. labour + manufacturing overhead = 731000

400000 + Dr. labour + 60% of Dr. labour = 731000

1.60 Direct labour = 331000

Direct labour =$ 206875

Dr. labour charged to production = $206875   

c. Cost of goods manufactured = Opening WIP + Cost charged to production - closinh WIP

= 85000 + 731000 - 30000

= 786000

d. Cost of goods sold = Opening stock + cost of goods manufactured - closing stock

= 90000 + 786000 - 110000

= 766000

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