Question

Zoe Corporation has the following information for the month of March: Cost of direct materials used in production$17,811 Direct labor29,363 Factory overhead32,472 Work in process inventory, March 120,353 Work in process inventory, March 3119,710 Finished goods inventory, March 124,290 Finished goods inventory, March 3128,183

Answer 1

Answer:

The question is not complete as requirement is not given.

However,in supply of information like this, determination of cost of sale is generally assumed to be the requirement.

The cost of sale for Zoe corporation for March is $76,396

Explanation:

Two accounts are needed to derive the cost of sale: manufacturing account and trading account.

Manufacturing account is prepared to determine the cost of production. The preparation of cost of production involves three major steps:

1. Determination of prime cost by adding direct material cost with material labor cost and other direct manufacturing cost.

2. Adding prime cost with factory overhead cost.

3. Adding changes in work in progress( Opening WIP  minus Closing WIP) to value arrived at step 2.

The figure arrived at is cost of production.

Trading account is prepared to derive the cost of sale for a particular period.

It involves adding opening finished goods with purchases (if any) and cost of production. After this, closing finished goods is subtracted from the figure derived above to arrive at cost of sales for the period.

Using information supplied by Zoe Corporation, the cost of sale is:

                                                         Zoe Corporation

                                               Manufacturing Account For March

                                                                            $            $

Cost of direct materials used in production                17,811

Direct Labor                                                                   29,363

Prime Cost                                                                      47,174

Add: Factory Overheard                                               32,472

                                                                                       79,646

Changes in Work in Progress

Begininng WIP                                          20,353

Closing WIP                                              (19,710)           643

Cost of Production                                                         80,289

                                              Trading Account For March

                                                                                           $

Opening Finished inventory                                         24,290

Add:Cost of production                                                 80,289

                                                                                       104,579

Closing Finished Inventory                                           (28,183)

Cost of Sale                                                                   76,396