Question

1. Langson is a manufacturing company. The following costs are found in its General Ledger Accounts for the month of August, 2019: i. Materials used $150,000 ii. Direct labor $620,000 Indirect Labor $120,000 iv. Additional Factory Overhead is 2 times the materials use rate. v. Administrative salaries $130,000 vi. Sales Salaries $60,000 vii. There were 1,000 units in production. Required: a. Total Cost of Goods in Production: Show computation b. What is the Unit cost of production? Show computation.

Answer 1

a. $ $ 150,000 620,000 Langson Manufacturing Company Schedule of Cost of Goods in Production For the Year Ended August 31, 2019 Direct Materials Used Direct Labor Factory Overhead: Indirect Labor $ 120,000 Indirect Materials $ 300,000 Total Factory Overhead Costs Cost of goods in production $ $ 420,000 1,190,000 *Administrative salaries, Sales salaries - It comes under the operating expenses. *Excluded from computation of cost of goods in production. $ b. Cost of goods in production Total Units Unit cost of production 1,190,000 1,000 1,190 $ $

*Additional FOH= 2*Direct materials used = $150,000*2 = $300,000

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