Cost Flow Relationships The following information is available for the first year of operations of Creston Inc., a manufacturer of fabricating equipment: Sales $1,309,200 Gross profit 353,500 Indirect labor 117,800 Indirect materials 48,400 Other factory overhead 22,300 Materials purchased 667,700 Total manufacturing costs for the period 1,445,400 Materials inventory, end of period 48,400 Using the above information, determine the following amounts: a. Cost of goods sold $ b. Direct materials cost $ c. Direct labor cost $

Question

Business

Juan Campbell

11 October, 12:52

Cost Flow Relationships The following information is available for the first year of operations of Creston Inc., a manufacturer of fabricating equipment: Sales $1,309,200 Gross profit 353,500 Indirect labor 117,800 Indirect materials 48,400 Other factory overhead 22,300 Materials purchased 667,700 Total manufacturing costs for the period 1,445,400 Materials inventory, end of period 48,400 Using the above information, determine the following amounts: a. Cost of goods sold $ b. Direct materials cost $ c. Direct labor cost $

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Answers (1)

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Kadyn Gill · Answer 1

The answer is

A. $955,700

B. $570,900

C. $734,400

Explanation:

A. Cost of sales

Gross profit = Sales - Cost of sales.

Therefore, Cost of sales will now be:

Sales - Gross profit

$1,309,200 - $353,500

=$955,700

B. Direct materials cost

Direct materials cost = material purchased - indirect materials - ending material Inventory

$667,700 - $48,400 - $48,400

=$570,900

C. Direct labor cost

Direct labor cost = manufacturing costs for the period - Direct materials cost - Other factory overhead - Indirect labor

$1,445,400 - $570,900 - $22,300 - $117,800

=$734,400