Question

LUU $16,000 Property taxes on office building CEO's salary Gas and oil for delivery trucks Instructions 5,000 870 12,000 2,200 Advertising Delivery equipment repairs Office supplies Office utilities Repairs on office equipment 4,600 300 650 990 mine the total amount of (a) delivery service (product) costs and (b) period costs. 180 18 (LO 3), AP Lopez Corporation incurred the following costs while manufacturing its product. Materials used in product $120,000 Advertising expense Depreciation on plant $45,000 60,000 Property taxes on plant 14,000 Property taxes on store 7,500 Delivery expense 21,000 Labor costs of assembly-line Sales commissions 35,000 workers 110,000 Salaries paid to sales Factory supplies used 23,000 clerks 50,000 Work in process inventory was $12,000 at January 1 and $15.500 at December 31. Finished goods inven tory was $60,000 at January 1 and $45,600 at December 31. Instructions a. Compute cost of goods manufactured. b. Compute cost of goods sold. E19 (LO 3), AP An incomplete cost of goods manufactured schedule is presented below. Hobbit Company

Answer 1

E1.8

a.

Schedule of Cost of Goods Manufactured
Materials used in product	120,000
Labor costs of assembly - line workers	110,000
Manufacturing overheads:
Depreciation on plant	60,000
Factory supplies used	23,000
Property taxes on plant	14,000
Total manufacturing costs	327,000
Work in process, beginning	12,000
Work in process, ending	-15,500
Cost of goods manufactured	$323,500

b.

Schedule of Cost of Goods Sold
Finished goods inventory, beginning	60,000
Cost of goods manufactured	323,500
Cost of goods available for sale	383,500
Finished goods inventory, ending	-45,600
Cost of goods sold	$337,900

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