(L. OBJ. 5) Flow of costs through a manufacturer’s inventory accounts [20-25 min] West...

(L. OBJ. 5) Flow of costs through a manufacturer’s inventory accounts [20-25 min]

West Shoe Company makes loafers. During the most recent year, West incurred total manufacturing costs of $25.8 M. Of this amount, $2.3 M was direct materials used and $18.8 M was direct labor. Beginning balances for the year were Direct Materials Inventory, $.9 M; Work in Process Inventory, $1 .2 M; and Finished Goods Inventory, $.4 M. At the end of the year, inventory accounts showed these amounts:

Requirements

1. Compute West Shoe Company’s cost of goods manufactured for the year.

2. Compute West’s cost of goods sold for the year.

3. Compute the cost of materials purchased during the year.