Question

 

Frederick Inc. had the following activities during 2018:

Direct materials:
Beginning inventory	$30,000
Purchases	122,800
Ending inventory	12,200
Direct manufacturing labour	24,000
Manufacturing overhead	26,000
Beginning work-in-process inventory	1,300
Ending work-in-process inventory	2,000
Beginning finished goods inventory	42,000
Ending finished goods inventory	21,000

Required:

1. What is the cost of direct materials used during 2018?
2. What are the total manufacturing costs incurred for 2018?
3. What is cost of goods manufactured for 2018?
4. What is cost of goods sold for 2018?

Answer 1

Answer of Part 1:

Cost of Direct Materials Used = Beginning Inventory + Purchases – Ending Inventory
Cost of Direct Materials Used = $30,000 + $122,800 - $12,200
Cost of Direct Materials Used = $140,600

Answer of Part 2:

Total Manufacturing Cost = Cost of Direct Materials Used + Direct Manufacturing Labor + Manufacturing Overhead
Total Manufacturing Cost = $140,600 + $24,000 + $26,000
Total Manufacturing Cost = $190,600

Answer of Part 3:

Cost of Goods Manufactured = Beginning Work in Process Inventory + Total Manufacturing Costs – Ending Work in Process Inventory
Cost of Goods Manufactured = $1,300 + $190,600 - $2,000
Cost of Goods Manufactured = $189,900

Answer of Part 4:

Cost of Goods Sold = Beginning Finished Goods Inventory + Cost of Goods Manufactured – Ending Finished Goods Inventory
Cost of Goods Sold = $42,000 + $189,900 - $21,000
Cost of Goods Sold = $210,900