Question

E1-9 L04 LO5 Determining materials, labor, and cost of goods sold The following inventory data relate to Edwards, Inc.: Inventories Ending Beginning Finished goods.. $75,000 $110,000 Work in process 80,000 70,000 Direct materials...... 95,000 90,000 Revenues and Costs for the Period: Sales $900,000 Cost of goods available for sale 775,000 Total manufacturing costs 675,000 Factory overhead 175,000 Direct materials used 205,000 Calculate the following for the year: a. Direct materials purchased. b. Direct labor costs incurred. c. Cost of goods sold. d. Gross profit. (Hint: The answers to subsequent parts may require using solu- tions from earlier parts.)

Answer 1

E1-9
a.)	Direct materials purchased	$ 210,000	=205000+95000-90000
b.)	Direct labor cost incurred	$ 295,000	=675000-205000-175000
c.)	Cost of goods sold	$ 700,000	=775000-75000
d.)	Gross profit	$ 200,000	=900000-700000

E1-7
a.)			Amount $
	Direct Materials
	Material Inventory, January 1	25,000
	Add: Material Purchases	21,000
	Materials available for use	46,000
	Less:Materials inventory, January 31	22,000
	Total Materials used	24,000
	Less: Indirect materials used	1,000
	Direct materials used		23,000
	Direct labor cost		18,000
	Factory Overhead		12,000
	Total Manufacturing costs		53,000
	Add: Work in process inventory, January 1		24,000
	Total Cost of work in process		77,000
	Less: Work in process inventory, January 31		20,000
	Cost of goods manufactured		57,000
b.)		Amount $
	Cost of goods manufactured	57,000
	Add: Finished goods inventory ,January 1	32,000
	Less: Finished goods inventory, January 31	30,000
	Cost of goods sold	59,000