Question

Cost Flow Relationships

The following information is available for the first month of operations of Bahadir Company, a manufacturer of mechanical pencils:

Sales	$491,130
Gross profit	286,330
Cost of goods manufactured	245,570
Indirect labor	106,580
Factory depreciation	16,210
Materials purchased	151,270
Total manufacturing costs for the period	282,400
Materials inventory, ending	20,140

Using the above information, determine the following missing amounts:

a. Cost of goods sold	$
b. Finished goods inventory at the end of the month	$
c. Direct materials cost	$
d. Direct labor cost	$
e. Work in process inventory at the end of the month	$

Answer 1

		$
a	Cost of goods sold	204,800.00
b	Finished goods inventory at the end of the month	40,770.00
c	Direct materials cost	131,130.00
d	Direct labor cost	135,060.00
e	Work in process inventory at the end of the month	36,830.00
	Explanation
a	Cost of goods sold
	Sales	491,130.00
	Less: Gross Profit	(286,330.00)
		204,800.00
b	Finished goods inventory at the end of the month
	Cost of goods manufactured	245,570.00
	Less: Cost of goods sold	(204,800.00)
	Add: Finished goods inventory at the beginning	-
		40,770.00
c	Direct materials cost
	Material at the beginning	-
	Add: Materials purchased	151,270.00
	Less: Materials inventory, ending	(20,140.00)
		131,130.00
d	Direct labor cost
	Total manufacturing costs for the period	282,400.00
	Less: Direct materials	(131,130.00)
	Less: Factory depreciation	(16,210.00)
		135,060.00
e	Work in process inventory at the end of the month
	Total manufacturing costs for the period	282,400.00
	Less: Cost of goods manufactured	(245,570.00)
		36,830.00