Question

Compute the Cost of Goods Manufactured and Cost of Goods Sold forWest Nautical Company for the most recent year using the amounts described next. Assume that Raw Materials Inventory contains only direct materials.Start the calculation for cost of goods manufactured by calculating the direct materials used.West Nautical CompanyCalculation of Direct Materials UsedFor Current YearBeginning of Year End of Year End of YearRaw materials inventory…….. $27,000 $30,000 Insurance of plant………... $10,000Work in process inventory…. $ 42,000 $37,000 Depreciation-plant building and equipment.............. $12,900Finished goods inventory…… $ 17,000 $21,000 Repairs and maintenance-plant................................ $3,500Purchases of direct materials… $75,000 Marketing expenses................................................... $79,000Direct labor………………… $87,000 General and administrative expenses........................ $22,500Indirect labor……………… $39,000Calulate the goods manufactured.

Answer 1

Answer:

$72,000 and $229,400

Explanation:

The computation is shown below:

For direct materials used:

= Beginning of Year raw material + Purchase of direct materials - end of year raw material

= $27,000 + $75,000 - $30,000

= $72,000

For goods manufactured, it would be

= Direct material used + Direct labor + Manufacturing Overhead

where,

Manufacturing Overhead would be

= Indirect labor + insurance on plant + Depreciation + Repairs and maintenance+ Beginning work-in-process - Ending work-in-process

= $39,000 + $10,000 + $12,900 + $3,500 + $42,000 - $37,000

= $70,400

So, the goods manufactured would be

= $72,000 + $87,000 + $70,400

= $229,400