Answer:
Instructions are listed below.
Explanation:
Giving the following information:
Total manufacturing costs= $26,100,000
Direct material= $2,000,000 used
Direct labor= $19,800,000
Beginning Direct Materials= $700,000
Begining Work-in-Process Inventory= $1,200,000
Beginning Finished Goods Inventory= $500,000.
Ending Direct Materials= $900,000
Ending Work-in-Process Inventory= $1,900,000
Ending Finished Goods Inventory= $420,000.
First, we need to calculate the cost of raw material purchased using the following formula:
Direct material used= beginning DM + purchases - ending DM
2,000,000= 700,000 + purchases - 900,000
400,000= purchases
Now, we can calculate the cost of goods manufactured using the following formula:
cost of goods manufactured= beginning WIP + direct materials + direct labor + allocated manufacturing overhead - Ending WIP
cost of goods manufactured= 1,200,000 + 26,100,000 - 1,900,000
cost of goods manufactured= 25,400,000
With this information we are in conditions to calculate the cost of goods sold:
COGS= beginning finished inventory + cost of goods manufactured - ending finished inventory
COGS= 500,000 + 25,400,000 - 420,000= 25,480,000
