Avery Corporation\'s northwestern factory provided the followinginformation for

Question

Avery Corporation's northwestern factory provided the followinginformation for the last calendar year:

During the year, direct materials purchases amounted to$150,000, direct labor cost was $200,000, and overhead cost was$324,700. There were 100,000 units produced.

Required:

Beginning inventory: Direct materials $50,800 Work in process 58,500 Ending inventories: Direct materials $21,500 Work in process 23,500 Avery Corporation's northwestern factory provided the followinginformation for the last calendar year: Beginning inventory: Direct materials $50,800 Work in process 58,500 Ending inventories: Direct materials $21,500 Work in process 23,500 During the year, direct materials purchases amounted to$150,000, direct labor cost was $200,000, and overhead cost was$324,700. There were 100,000 units produced. Required: Calculate the total cost of direct materials used inproduction. $ Calculate the cost of goods manufactured. $ Calculate the unit manufacturing cost. $ Of the unit manufacturing cost calculated in Requirement 2,assume $1.70 is direct materials and $3.24 is overhead. What is theprime cost per unit? $ Conversion cost per unit?

Explanation / Answer

Calculate the total cost of direct materials used inproduction.
      $       $50,800+ $58,500 + $150,000 - $21,500 - $23,500=   $214,300
Calculate the cost of goods manufactured.
   $          $214,300+ $200,000 + $324,700 = $739,000
Calculate the unit manufacturing cost.
   $       $739,000/ 100,000

Of the unit manufacturing cost calculated in Requirement 2, assume$1.70 is direct materials and $3.24 is overhead. What is the primecost per unit?
  $       $1.70+ $2.00
Conversion cost per unit? $2.00 +$3.24   =   5.24

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