EX 2-2 Cost flow relationships The following information is available for the fi

Question

EX 2-2 Cost flow relationships The following information is available for the first year of operations of Engle Inc., a manu- facturer of fabricating equipment: obj. 2 Sales Gross proft Indirect labor Indirect materials Other factory overhead Materials purchased Total manufacturing costs for the period Materials inventory, end of period 7,270,000 1,450,000 330,000 195,000 90,000 5,100,000 6,170,000 480,000 Determine the following amounts A. Cost of goods sold B. Direct materials cost C. Direct labor cost

Explanation / Answer

A.Cost of goods sold = sales - gross profit

=> $7,270,000 - 1,450,000 =>$5,820,000.

B.direct materials cost :

C.Direct labour cost:

materials purchased $5,100,000 less: materials inventory (480,000) less: indirect materials (195,000) direct material cost $4,425,000

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