Question

Unit cost; Inventory valuation; cost of goods sold The cost department of the while corporation prepared the following data and costs for the year 19-- Inventories: January 1 December 31 Finished goods……………….... $48,600 ? Work in process……………….. 81,500 $42,350 Materials…………………………. 34,200 49,300 Depreciation –factory equipment……………………………………….... 21,350 Interest earned…………………………………………………………………..... 6,300 Finished goods inventory January 1:300 units December 31:420 units all from current year’s production Sold during 19—3,880 units at $220 per unit Materials purchased…………………………………………………………………………………….... $364,000 Direct labor…………………………………………………………………………………………….. …….. 162,500 Indirect labor……………………………………………………………………………………………….…. 83,400 Freight in…………………………………………………………………………………………….………….. 8,600 Miscellaneous factory overhead………………………………………………………………………. 47,900 Purchases discount………………………………………………………………………………………..…. 5,200 Required: 1) The unit cost of the finished goods inventory December 31 2) The total cost of the finished goods inventory December 31 3) The cost of goods sold 4) The gross profit total and the gross profit per unit

Answer 1

Direct Material consumed:
Beginning Balance of Raw material				34200
Add: Purchase net of discount (364000-5200)				358800
Add: Freight Inwards				8600
Sub-Total				401600
Less: Ending Balance of Raw material				49300
Direct Material consumed:				352300
Total Units produced:
Sales units				3880
Add: Ending inventory of FG				420
Total units available				4300
Less: Beginning Inventory of FG				300
Units Produced				4000
Req 1.
Unit cost of Finished Goods:
Beginning Inventory of Work in process					81500
Current cost of manufacturing:
Direct Material consumed				352300
Direct Labour				162500
Manufacturing Overheads
Depreciation-Factory			21350
Indirect Labour			83400
Misc. factory Overheads			47900
Total Manufacturing Overheads				152650
Current cost of manufacturing:					667450
Total cost of work in process					748950
Less: Ending inventory of Work in process					42350
Cost of Goods Manufactured					706600
Divide: Units Produced					4000
Unit cost of Finished Goods:					176.65
Req 2.
Unit cost of Finished Goods					176.65
Multiply: Number of Ending inventory of FG					420
Total cost of Finished Goods inventory					74193
Req 3.
Cost of goods sold:
Beginning Inventory of FG				48600
Add: Cost of goods manufactured				706600
Total ccost of goods available for sale				755200
Less: Ending inventory of FG				74193
Cost of goods sold:				681007
Req 4.
Gross Profit and Gross Profit per unit:
Sales		(3880*220)		853600
Less: Cost of goods sold				681007
Gross Profit				172593
Divide: Number of units sold				3880
Gross Profit per unit				44.48