$21,000 23,000 2. Direct materials inventory, beginning of year Direct materials

Question

$21,000 23,000 2. Direct materials inventory, beginning of year Direct materials inventory, end of year Work in process inventory, beginning of year Work in process inventory, end of year Finished goods inventory, beginning of year Finished goods inventory, end of year Indirect Labor Sales Indirect Materials Selling expenses Factory Supplies Administrative expenses Factory Rent Direct materials purchased Depreciation on Factory Machines Direct Labor cost Factory Electricity Research and development expense Factory Heat 55,000 52,000 42,000 47,000 20,000 980,000 6,000 80,000 8,000 90,000 48,000 110,000 22,000 210,000 16,000 40,000 60.000 Please use the information above to calculate the following a) Direct materials used b) Manufacturing overhead (indirect manufacturing costs) c) Total manufacturing costs d) Cost of goods manufactured e) Cost of goods sold and Gross Profit f) Operating expenses and Operating Income

Explanation / Answer

a) Direct Materials Used :-

= Direct Materials Purchased + Direct Materials Beginning Inventory - Direct Materials Ending Inventory

= $110000 + $21000 - $23000

= $108000

b) Manufacturing Overhead :-

c) Total Manufacturing Costs :-

= Direct Material Used + Direct Labor + Manufacturing Overhead

= $108000 + $210000 + $180000

= $498000

d) Cost of Goods Manufactured :-

= Total Manufacturing Costs + Beginning WIP Inventory - Ending WIP Inventory + Research and development Exp.

+ Administrative Exp.

= $498000 + $55000 - $52000 + $40000 + $90000

= $631000

e). Cost of Goods Sold :-

= Cost of goods Manufactured + Beginning Finished Inventory - Ending Finished Inventory + Selling Expense

= $631000 + $42000 - $47000 + $80000

= $706000

Gross Profit :-

= Sales - Cost of goods sold

= $980000 - $706000

= $274000

Particulars Amount($) Indirect Materials 6000 Indirect Labor 20000 Factory Supplies 8000 Factory Rent 48000 Dep. on Factory Machines 22000 Factory Electricity 16000 Factory Heat 60000 Total Manufacturing Overhead 180000

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