Question

Road Warrior Corporation began operations early in the current year, building luxury motor homes. During the year, the company started and completed 50 motor homes at a cost of $60,000 per unit. Of these, 48 were sold for $100,000 each and two remain in finished goods inventory. In addition, the company had six partially completed units in its factory at year-end. Total costs for the year (summarized alphabetically) were as follows Direct materials used Direct labor General and administrative $ 721,000 841,000 500,000 expenses Income tax expense Manufacturing overhead Selling expenses 100,000 1,650,000 500,000 Instructions a. Compute the total manufacturing costs charged to work in process for the current year Total manufacturing costs b. Compute the cost of finished goods manufactured for the current year: Cost of finished goods manufactured c. Compute the cost of goods sold for the current year: Cost of goods sold

Answer 1

a
Direct materials used	721000
Direct labor	841000
Manufacturing overhead	1650000
Total manufacturing costs	3212000
b
Cost of finished goods manufactured	3000000	=50*60000
c
Cost of goods sold	2880000	=48*60000
d
Sales revenue	4800000	=48*100000
Less: Cost of goods sold	2880000
Gross Profit	1920000