Question

ORT ANSWER. Write the word or phrase that best comple Write the word or phrase that best completes each statement or answers the question. 41) Millworks Company manufactured 100,000 units in 2018 and reported the following costs: Sandpaper Materials handling Coolants & lubricants Indirect manufacturing labor Direct manufacturing labor Direct materials, 1/1/18 Finished goods, 1/1/18 Finished goods, 12/31/18 Work-in-process, 1/1/18 Work-in-process, 12/31/18 $ 32,000 320,000 22,400 275,200 2,176,000 348,000 672,000 1,280,000 96,000 64,000 Leasing costs-plant Depreciation-equipment Property taxes-equipment Fire insurance-equipment Direct material purchases Direct materials, 12/31/18 Sales revenue Sales commissions Sales salaries Advertising costs Administration costs $ 384,000 224,000 32,000 16,000 3,140,000 280,000 12,800,000 640,000 576,000 480,000 800,000 Required: a. What is the amount of direct materials used during 2018? b. What manufacturing costs were added to WIP during 2018? c. What is cost of goods manufactured for 2018? d. What is cost of goods sold for 2018? Explanation:

Answer 1

Solution

Millworks Inc

1. Determination of the amount of direct materials used during 2018:

Amount of direct materials used = beg. Raw materials inventory + purchases – ending raw materials inventory

= $348,000 + 3,140,000 – 280,000 = $3,208,000

Direct materials used during 2018 = $3,208,000

b. determination of the manufacturing costs added to work in process during 2018:

Manufacturing costs:

Cost of direct materials used		$3,208,000
Direct labor		$2,176,000
Manufacturing overhead costs:
sandpaper	$32,000
materials handling	$320,000
Coolants and lubricants	$22,400
Indirect manufacturing labor	$275,200
leasing costs -plant	$384,000
depreciation - equipment	$224,000
property taxes - equipment	$32,000
fire insurance - equipment	$16,000
total manufacturing overhead		$1,305,600
Total manufacturing costs added to WIP during 2018		$6,689,600

c. Determination of cost of goods manufactured during 2018:

Cost of goods manufactured:
Beginning work in process		$96,000
Cost of direct materials used		$3,208,000
Direct labor		$2,176,000
Manufacturing overhead costs:
sandpaper	$32,000
materials handling	$320,000
Coolants and lubricants	$22,400
Indirect manufacturing labor	$275,200
leasing costs -plant	$384,000
depreciation - equipment	$224,000
property taxes - equipment	$32,000
fire insurance - equipment	$16,000
total manufacturing overhead		$1,305,600
Subtotal		$6,785,600
Less: ending work in process		$64,000
Cost of goods manufactured		$6,721,600
d. Cost of goods sold for 2018: Cost of goods manufactured $6,721,600 Add: beginning finished goods $672,000 Goods available for sale $7,393,600 Less: ending finished goods $1,280,000 Cost of goods sold $6,113,600