The following information is available for the first year of operations of Engle Inc., a manufacturer of fabricating equipment: Sales $7,270,000 Gross profit 1,450,000 Indirect labor 330,000 Indirect materials 195,000 Other factory overhead 90,000 Materials purchased 5,100,000 Total manufacturing costs for the period 6,170,000 Materials inventory, end of period 480,000 Determine the following amounts:

Question

Business

Olive Blackburn

5 March, 00:38

The following information is available for the first year of operations of Engle Inc., a manufacturer of fabricating equipment: Sales $7,270,000 Gross profit 1,450,000 Indirect labor 330,000 Indirect materials 195,000 Other factory overhead 90,000 Materials purchased 5,100,000 Total manufacturing costs for the period 6,170,000 Materials inventory, end of period 480,000 Determine the following amounts:

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Answers (1)

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Sidney Knapp · Answer 1

Consider the following calculations

Explanation:

Step 1. Given information

Sales $7,270,000 Gross profit 1,450,000 Indirect labor 330,000 Indirect materials 195,000 Other factory overhead 90,000 Materials purchased 5,100,000 Total manufacturing costs for the period 6,170,000 Materials inventory, end of period 480,000

Step 2. Calculation according to the following formulas.

a. Cost of goods sold = Sales-Gross profit = 7270000-1450000 = $582000

b. Direct materials cost = 5100000-195000-480000 = $4425000

c. Direct labor cost = 6170000-4425000-330000-195000-90000 = $1130000