Question

You have the following information about the activities of Martin Inc. for 2014:

   

Sales	$	1,620,000
Factory maintenance		67,500
Indirect labour		33,500
Direct material purchases		210,000
Factory utilities		50,000
Direct materials used in production		201,000
General and administrative expenses		102,400
Beginning work-in-process inventory		28,400
Beginning finished goods inventory		63,700
Ending work-in-process inventory		32,900
Beginning direct materials inventory		17,500
Selling expenses		98,200
Direct labour		287,000
Factory insurance		46,500
Indirect materials		40,600
Depreciation,factory		60,000
Cost of goods sold		715,000

   

Required:

1.	What was the amount of the ending direct materials inventory?

        

2.	What was the amount of the total manufacturing costs?

        

3.	What was the cost of goods manufactured in 2014?

         

4.	What was the amount of the ending finished goods inventory?

      

Answer 1

Cost of ending direct matetials inventory:- $

Beginning direct material inventory(A)..............17500

Add:Direct material purchases(B)....................210000

Less:Direct materials used in production(C)...201000

1.Closing direct materials inventory(A+B-C)..184000

Computation of total manufacturing cost:- $

a. Direct materials used in production : 201000

b.Direct labour used in production : 287000

c. Direct factory overheads:

- Factory maintenance : 67500

-Factory insurance : 46500

-Factory utilities : 50000

-Depreciation of factory : 60000

A.Direct costs (a+b+c) : 712000

B.Add: General Administrative overheads:

Indirect material : 40600

Indirect labour : 33500

General and administrative expenses : 102400

Total manufacturing costs (A+B) : 888500

C.Add: Opening work-in-process inventory:28400

D.Less:Closing work-in-process inventory:32900

Total cost of goods manufactured in 2014​ : 884000

Add : Opening inventory of finished goods : 63700

Less: Cost of goods sold : 715000

Closing inventory of finished goods : 232700

ANSWERS:

1.184000

2.888500

3.884000

4.232700