Question

In September, Lauren Ashley Company purchased materials costing $220,000 and incurred direct labor cost of $150,000. Overhead totaled $310,000 for the month. Information on inventories was as follows:

	September 1		September 30
Materials	$140,000		$130,000
Work in process	$90,000		$70,000
Finished goods	$60,000		$80,000

Required:

1. What was the cost of direct materials used in September ?

$

2. What was the total manufacturing cost in September ?

$

3. What was the cost of goods manufactured for September ?

Answer 1

1) cost of direct materials used in September	230,000.00
2) total manufacturing cost	690,000.00
3) cost of goods manufactured	710,000.00
Particulars	Amount
Beginning inventory, raw materials	140,000.00
Plus: Purchases of raw materials	220,000.00
Raw materials available for use = Beg + Purchase	360,000.00
Less: Ending raw materials inventory	(130,000.00)
Cost of direct raw materials used	230,000.00
Add Direct Labor	150,000.00
Add Manufacturing overhead	310,000.00
Total manufacturing costs	690,000.00
Plus: Beginning work-in-process inventory	90,000.00
Total work in process	780,000.00
Less: Ending work-in-process inventory	(70,000.00)
Cost of Goods Manufactured	710,000.00