Question

Cost of Direct Materials, Cost of Goods Manufactured, Cost of Goods Sold Bisby Company manufactures fishing rods. At the beginning of July, the following information was supplied by its accountant: Raw materials inventory $40,000 Work-in-process inventory 21,000 Finished goods inventory 23,200 During July, the direct labor cost was $43,500, raw materials purchases were $64,000, and the total overhead cost was $108,750. The inventories at the end of July were: Raw materials inventory $19,800 Work-in-process inventory 32,500 Finished goods inventory 22,100 Required:
1. What is the cost of the direct materials used in production during July? $
2. What is the cost of goods manufactured for July? $
3. What is the cost of goods sold for July?

Answer 1

Answer:

1. $84,200

2. $224,950

3.  $226,050

Explanation:

The computations are shown below:

1. Cost of the direct materials used would be

= Beginning Raw materials inventory balance + raw materials purchases - ending Raw materials inventory balance

= $40,000 + $64,000 -$19,800

= $84,200

2. Cost of goods manufactured would be

= Direct materials used + Direct labor cost + Manufacturing overhead cost  + beginning work-in-process inventory - ending work-in-process inventory

= $84,200 + $43,500 + $108,750 + $21,000 - $32,500

= $224,950

3. Cost of goods sold would be

= Beginning Inventory + Cost of goods manufactured - Ending Inventory

= $23,200 + $ 224,950 - $22,100

= $226,050