Question

Cost Flow Relationships

The following information is available for the first year of operations of Creston Inc., a manufacturer of fabricating equipment:

Sales	$1,270,300
Gross profit	343,000
Indirect labor	114,300
Indirect materials	47,000
Other factory overhead	21,600
Materials purchased	647,900
Total manufacturing costs for the period	1,402,400
Materials inventory, end of period	47,000

Using the above information, determine the following amounts:

a. Cost of goods sold	$
b. Direct materials cost	$
c. Direct labor cost	$

Answer 1

A)	Cost of Goods sold	927,300
	Calculation of cost of Goods sold:
	Sales	1,270,300
	Less: Gross Profit	(343,000)
	Cost of Goods sold	927,300
b)	Direct Material Cost	553,900
	Calculation of Direct Material cost
	Materials purchased	647,900
	Less: Indirect material	(47,000)
	Less: Material Ending Inventory	(47,000)
	Direct Material Cost	553,900
c)	Direct labor cost	665,600
	Calculation of Direct labor cost
	Total manufacturing costs for the period	1402400
	Less:
	Direct Material Cost	(553,900)
	Indirect labor	(114,300)
	Indirect materials	(47,000)
	Other factory overhead	(21,600)
	Direct labor cost	665,600