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16 February, 18:10

The following information is available for the first month of operations of Bahadir Company, a manufacturer of mechanical pencils: Sales $792,000 Gross profit 462,000 Cost of goods manufactured 396,000 Indirect labor 171, 600 Factory depreciation 26, 400 Materials purchased 244, 200 Total manufacturing costs for the period 455, 400 Materials inventory, ending 33,000 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

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  1. 16 February, 21:55
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    Part (a) Cost of goods sold

    Sales $792,000

    Less Gross profit $462,000

    Cost of goods sold $330,000

    Part (b) Finished goods inventory at the end of the month

    Opening Finished Goods 0

    Add Cost of goods manufactured 396,000

    Available for Sale 396,000

    Less Cost of goods sold 330,000

    Finished goods inventory 66,000

    Part (c) Direct materials cost

    Opening Materials 0

    Add Materials purchased 244, 200

    Available for production 244, 200

    Less Materials inventory, ending 33,000

    Direct Materials Cost 211,200

    Part (d) Direct labor cost

    Total manufacturing costs for the period 455, 400

    Less Direct Materials Cost 211,200

    Less Indirect labor 171, 600

    Less Factory depreciation 26, 400

    Direct labor cost 46,200

    Part (e) Work in process inventory at the end of the month

    Total manufacturing costs for the period 455, 400

    Less Cost of goods manufactured 396,000

    Work in process inventory 59,400

    Explanation:

    Part (a) Cost of goods sold

    Cost of goods sold = Sales Less Gross profit

    Part (b) Finished goods inventory at the end of the month

    Finished goods inventory = Opening Finished Goods Add Cost of goods manufactured Less Cost of goods sold

    Part (c) Direct materials cost

    Direct Materials Cost = Opening Materials Add Materials purchased Less Materials inventory, ending

    Part (d) Direct labor cost

    Direct labor cost = Total manufacturing costs for the period Less all other manufacturing costs

    Part (e) Work in process inventory at the end of the month

    Work in process inventory = Total manufacturing costs for the period Less Cost of goods manufactured
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