Problem 1 The accounting records of Cinotti Manufacturing Company include the fo
ID: 2444415 • Letter: P
Question
Problem 1 The accounting records of Cinotti Manufacturing Company include the following information:
Dec. 31, 2017
Dec. 31, 2016
Work in process inventory
$ 10,700
$ 12,200
Finished goods inventory
35,000
32,600
Materials purchased
116,300
Raw materials inventory
?
18,000
Indirect materials transferred to production
12,100
Direct materials used
115,400
Manufacturing overhead applied
133,100
Manufacturing overhead incurred
134,600
Direct labor incurred
120,000
Selling expenses
67,000
Calculate the following:
1. Raw materials inventory at 12-31-17
2. Total manufacturing costs during 2017
3. Cost of goods manufactured during 2017
4. Cost of goods sold for 2017
5. Total product costs for the year ending December 31, 2017. Label the financial statements and specific sections on which these amounts are reported
Dec. 31, 2017
Dec. 31, 2016
Work in process inventory
$ 10,700
$ 12,200
Finished goods inventory
35,000
32,600
Materials purchased
116,300
Raw materials inventory
?
18,000
Indirect materials transferred to production
12,100
Direct materials used
115,400
Manufacturing overhead applied
133,100
Manufacturing overhead incurred
134,600
Direct labor incurred
120,000
Selling expenses
67,000
Explanation / Answer
Answer:
1) Calculation of Raw materials inventory at Dec 31, 2017
Raw Material Consumed/Used = Opening Raw Material Inventory (Jan 1, 2016) + Raw Material purchased during the year - Closing Inventory of Raw Material (Dec 31, 2017)
$115400 = $18000 + $116300 - Raw Material Inventory at Dec 31, 2017
Raw Material Inventory at Dec 31, 2017 = $18,900
Here, Raw Material (Direct Material) Used is given in question = $115400
2) Total manufacturing costs during 2017
Total Manufacturing Cost = Raw Material Used + Direct Labour Cost + Indirect Manufacturing Overheads + Indirect Raw material transferred to production + WIP Dec31, 2016 – WIP Dec 31, 2017
= $115400 + $120000 + $12100 + $134600 + $12200 - $10700 = $383,600
3) Cost of goods manufactured during 2017
Cost of Goods Manufactured During 2017 = Total Manufacturing Cost + Administrative Cost
= $383,600 + 0
= $383600
4) Cost of goods sold for 2017
Cost of Goods Sold for 2017 = Cost of Goods Manufactured + Finished goods inventory Dec 31, 2016 - Finished goods inventory Dec 31, 2017
= $383600 + $32600 - $35000
= $381,200
5) Total Product Cost = Cost of Goods Sold + Selling Expenses
= $381200 + $67000
= $448,200
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