Question

THE FOLLOWING INFORMATION IS USED FOR QUESTIONS 1 – 6.

Quiz Company reported the following information for the month of July.

Sales	$550,000
Materials purchases	64,000
Direct labor	43,500
Overhead	108,750
Selling costs	94,000
Administrative costs	183,500
Raw materials inventory, July 1	40,000
Work-in-process inventory, July 1	21,000
Finished goods inventory, July 1	23,200
Raw materials inventory, July 31	19,800
Work-in-process inventory, July 31	32,500
Finished goods inventory, July 31	22,100

Determine the cost of direct materials used for the month ended July 31.

Give your answer using dollar signs and commas but no decimal points (cents).

Determine the cost of goods manufactured for the month ended July 31.

Give your answer using dollar signs and commas but no decimal points (cents).

Determine the cost of goods sold for the month ended July 31.

Give your answer using dollar signs and commas but no decimal points (cents).

Determine operating income for the month ended July 31.

Give your answer using dollar signs and commas but no decimal points (cents).

Determine the prime cost for the month ended July 31.

Give your answer using dollar signs and commas but no decimal points (cents).

Determine the conversion cost for the month ended July 31.

Give your answer using dollar signs and commas but no decimal points (cents).

Answer 1

Req 1.
Cosst of Direct Material used:
Beginning inventory of RM	40,000
Add: Purchase		64,000
Total RM available		1,04,000
Less: Ending inventory of Rm	19,800
Direct material used		84,200
Req 2.
Cost of goods manufactured:
Beginning Inventory of WIP	21000
Add: Current cost of manufacture
Direct material cost	84200
Direct Labour cost	43500
Overheads applied	108750
Current cost of Manufacture	236450
Total cost of WIP		257450
Less: Ending inventory of WIP	32500
Cost of goods manufactured:	224950
Req 3.
Cost of goods sold:
Beginning Inventory of FG	23200
Add: Cost of goods manufactured	224950
Total cost of goods available	248150
Less: Ending inventory of FG	22100
Cost of goods sold:		226050
Req 4.
Operating Income:
Sales revenue		5,50,000
Less: COGS		226050
Gross Profit		3,23,950
Less: Selling admin expenses
Selling cost		94000
Admin cost		183500
Net Operating income	46,450
Req 5.
Prime Cost:
Direct material used		84200
Direct Labour cost		43500
Prime Cost:		127700
Req 6.
Conversion cost:
Direct labour cost		43500
Manufacturing overheads	108750
Conversion cost:		152250