Question

n West Shoo makes loafers. During the most recent year, West incurred total manufacturing costs of $24.200,000. Of this amount, $1,800,000 was direct k-in-Process Inventory, $900,000, and Finished balances for the year were Direct Materials,$700,000, Wor Goods Inventory, $1,100,000 At the end of the year, balances were Direct Materials, $900,000, Work-in-Process Inventory, $1,700,000, and Finished Goods Inventory $480,000

Answer 1

Solution 1:

Computation of direct material purchased
Particulars	Amount
Direct materials used	$1,800,000.00
Add: Ending direct materials	$900,000.00
Less: Beginning direct materials	$700,000.00
Direct material purchases	$2,000,000.00

Solution 2:

Computation of cost of goods manufactured
Particulars		Amount
Beginning work in process inventory		$900,000.00
Direct material used	$1,800,000.00
Direct labor	$17,800,000.00
Manufacturing overhead	$4,600,000.00
Total manufacturing cost incurred during the year		$24,200,000.00
Total manufacturing cost to account for		$25,100,000.00
Ending work in process inventory		$1,700,000.00
Cost of goods manufactured		$23,400,000.00

Solution 3:

Computation of Cost of goods sold
Particulars	Amount
Beginning finished goods inventory	$1,100,000.00
Cost of goods manufactured	$23,400,000.00
Cost of goods available for sale	$24,500,000.00
Ending finished goods inventory	$480,000.00
Cost of goods sold	$24,020,000.00