Answer:
A. Calculate sales revenue as follows:
Sales Revenue = (Closing Account Receivable) + (Collection Dining the year) - (Opening Account Receivable)
Sales Revenue = $33,000 + $625,000 - $27,000
Sales Revenue = $631,000
Hence, sales revenue is $631,000.
B. Calculate cost of goods sold as follows:
Cost of Goods Sold = 68% of Sales
Cost of Goods Sold = 68% of $631,000
Cost of Goods Sold = $429,080
Hence, cost of goods sold is $429,080.
C. Compute cost of goods manufactured as follows:
Cost of goods manufactured = (Cost of good sold) + (Closing Finished goods) - (Opening Finished goods)
Cost of goods manufactured = $429,080 + $15,000 - $3,000
Cost of goods manufactured = $441,080
Hence, cost of goods manufactured is $441,080.
D. Calculate direct material used as follows:
Direct material used = Opening Material + Material Purchased - Closing material
Direct material used = $22,500 + $90,000 - $6,000
Direct material used = $106,500
Hence, direct material used is $106,500.
E. Calculate direct labour incurred as follows:
Step 1:
Total Manufactured Cost = Cost of Goods Manufactured + Closing WIP - Opening WIP
Total Manufactured Cost = $441,080+$48,000-$70,200
Total Manufactured Cost = $418,880
Step 2:
(Direct labor incurred) = (Total manufacturing Cost) - [(Direct Material Incurred) + (Factory overhead)]
Direct labor incurred = $418,880 - $106,500 - (300% of direct labor incurred)
(Direct labor incurred =100% of direct labor incurred+300% of direct labor incurred=$312,380 400% of direct labor incurred=$312,380
Direct labor incurred = $312,380/400 ×100
Direct labor incurred = $78,095
Hence, direct labour incurred is $78,095.
F. Calculate factory overhead incurred as follows:
Factory overhead incurred = 300% of Direct labour incurred
Factory overhead incurred=300%.$78,095
Factory overhead incurred= $234,285
Hence, factory overhead incurred is $234,285.
