Armidale Innovations deals in the manufacture of iPads. For 2016, the books of A

Question

Armidale Innovations deals in the manufacture of iPads. For 2016, the books of Armidale Innovations reveal the following information: Opening inventory of Direct materials for the year was $47000, while the closing inventory was $27800 and the Procurement manager purchased Direct materials worth $130200 during the year. Additional information from the company’s books for the year are given below ($): Total payments to Direct labour (manufacturing) 39,000 Indirect Manufacturing costs (overhead) 31,000 Work-in-process Opening inventory 8,600 Work-in-process Closing inventory 15,000 Finished goods Opening inventory 55,000 Finished goods Closing inventory 39,000 Required: Work out the following, showing all supporting calculations/working: a.During 2016 how much of the direct materials were used in production? b.For 2016, how much was the cost of goods manufactured? c.For 2016, how much was the cost of goods sold? d.How much of Prime Costs was recorded for year? e.How much of Conversion Costs was recorded for year?

Explanation / Answer

Ans(a) Direct Materials used in production= $149,400

Ans(d) Prime cost= $188,400

Ans(e) Conversion costs= $70,000

Ans(b) Cost of goods manufactured= $213,000

Ans(c) Cost of goods sold= $229,000

Particulars Amount (in $) Amount(in $) Opening inventory of Direct Materials 47000 Add: Purchase of Direct Materials 130200 Less: Closing inventory of Direct Materials 27800 Direct Materials used in production 149400

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