Question

In: Accounting

Omaha LLC had the following inventory amounts: 12/31/2019 3/31/2020 Raw materials 3052 3135   WIP 3771 3804...

Omaha LLC had the following inventory amounts:

12/31/2019 3/31/2020

Raw materials 3052 3135  

WIP 3771 3804

Finished goods 2251 2175

During Q1 2020, the company transferred $4294 of raw materials. to WIP. In addition, the firm incurred the following costs during the quarter: direct labor of $2584, variable manufacturing overhead of $2180, fixed manufacturing overhead of $2190, variable non-manufacturing overhead of $2027, and fixed non-manufacturing overhead of $2607. Omaha uses full absorption costing.

a.How much raw materials did Omaha purchase in Q1 2020?

b.How much is Omaha's cost of goods manufactured?

c.Notwithstanding your answer to the prior question, assume the cost of goods manufactured is $9525. How is much is the cost of goods sold?

Solutions

Expert Solution

Answer:
1)
Raw material (RM) Purchase
        =   Goods transferred + Ending RM (-) Beginning RM
        = $4,294 + $3,135 (-) $3,052
        = $4,377
Raw material (RM) Purchase in 2020 = $4,377
2)
Cost of Goods Manufactured
         = DM +DL + VMOH + FMOH + Beginning WIP (-) Ending WIP
        =   $4,294 + $2,584 + $2,180 + $2,190 + $3,771 (-) $3,084
        = $11,935
Cost of Goods Manufactured = $11,935
3)
Cost of goods sold   = Beginning FG + Cost of Goods Manufactured (-) Ending FG
                                        = $2,251 + $9,525 (-) $2,175
                                        = $9,601
Cost of goods sold   =   $9,601

ekkarill92 answered 2 years ago
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