Champagne of the South, Inc., a manufacturer of bottled sweet tea, had the follo

Question

Champagne of the South, Inc., a manufacturer of bottled sweet tea, had the following beginning and ending inventories for the year ended December 31, 2013 January 1 December 31 Raw Materials Inventory* $10,000 $18,593 $21,000 $17,000 $16,500 Finished Goods Inventory Raw Materials Inventory consists of both direct material and indirect material During the year, direct labor costs of $30,000 were incurred, manufacturing overhead totaled $42,000, materials purchased were $27,000, and selling and administrative costs were $22,000. Champagne sold 25,000 units of product during the year at a sales price of $5.00 per unit. What were the total manufacturing costs for the year assuming $2,032 of indirect materials were used during the period? The total manufacturing costs for the year were $

Explanation / Answer

Solution:

Calculation of the Total Manufacturing Costs for the Year:

Therefore, the Total manufacturing Costs for the Year were is $97,968.

Beginning Raw Materials $10,000 Add: Purchases $27,000 Less: Ending Raw Materials ($9,000) Raw Materials Used $28,000 Less: Indirect Materials Used ($2,032) Direct Materials Used $25,968 Add: Direct Labor $30,000 Add: Manufacturing Overhead $42,000 Total Manufacturing Costs $97,968

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