Question

1. Information from the records of the Freya Corporation for the month of April 2019 is as follows: Direct materials inventory, beginning Direct materials inventory, ending Direct labor Direct material purchases Factory wages Finished goods inventory, beginning Finished goods inventory, ending Indirect materials Rent on factory building Sales Selling and administrative expenses Utilities in the factory WIP inventory, beginning WIP inventory, ending $25,000 28,000 45,000 58,000 18,000 25,000 22,000 11,000 23,000 220,000 21,000 12,000 7,000 15,000 Assume a tax rate of 30 percent. Required: a. Calculate direct materials used for April. Calculate cost of goods manufactured for April. Calculate gross profit for April. Calculate after-tax net income for April. Calculate prime costs for April. Calculate conversion costs for April.

Answer 1

Direct materials used opening Raw materials (+) Purchases tl closing poww materials $ 25000 $ 58000 ($ 28000) $ 55000 6 Direct Labour $ 45000 $10000 O $18000 Prime costs Factory wases Rent on factory Building utilities in factory Indirect materials $23000 $12000 411000 Tolol manufacturing cooler (+) Beginniла оғE in pro44 (TP) $164000 $ 7000 171000 () Ending wip (15000) Total cost of goods manufactured $ 156000

a) $55000 b) cost of goods manufactured & c) Gross profit = sales - cost of goods solo = $220000 ARISEPOD = Sales cost of goods sold = opening + a) Direct materials used - $55000- b) cost of goods manet actured - $ 156000 c) Gross profit - Sales - cost of goods sold .c) - 220000 - 100000 + 7000 – 15000 = $ 112000 After Tare Pncome - ' $ 112000 - 18000 – 23000 –12000 –11000 - 21000 z yoqoc-63004. - 27000 -301. = $(83600 1$ 18900 Prime cost = $100000 conversion costs. = 156000 d) e)