Question

Rundle Manufacturing Company began operations on January 1. During the year, it started and completed 1,640 units of product. The financial statements are prepared in accordance with GAAP. The company incurred the following costs: 1. Raw materials purchased and used-$3,130. 2. Wages of production workers-$3,460. 3. Salaries of administrative and sales personnel-$1,965. 4. Depreciation on manufacturing equipment-$4,890. 5. Depreciation on administrative equipment-$1,825. Rundle sold 1,090 units of product. Required a. Determine the total product cost for the year. b. Determine the total cost of the ending inventory. (Do not round intermediate calculations.) c. Determine the total of cost of goods sold. (Do not round intermediate calculations.) a. b. Total product cost Total cost of ending inventory Total cost of goods sold c.

Answer 1

Answer:

A)

Raw material used	$    3130
Wages of production worker	$    3460
Depreciation of manufacturing equipment	$    4890
Total manufacturing cost	$ 11,480.00

Administrative salary and depreciation of administrative equipment is not considered a product cost.

(B) and (C)

A	Total manufacturing cost	$ 11,480.00
B	Units produced	$    1,640.00
C=A/B	Cost per unit	$            7.00
D	Units in ending inventory (1640-1090)	550
E= C x D	Cost of the ending inventory	$    3,850.00
F	Units sold	1090
G=F x C	Cost of goods sold	$    7,630.00