Question

Selected data concerning the past year’s operations of the Ozarks Manufacturing Company are as follows:

Inventories

Beginning Ending

Raw material $ 61,000 $ 81,000

Work in process 80,000 30,000

Finished goods 90,000 110,000

Other data: Direct material used $ 326,000 Total manufacturing costs charged to production during the year (includes direct material, direct labor, and manufacturing overhead applied at a rate of 60% of direct-labor cost) 686,000

Cost of goods available for sale 826,000

Selling and administrative expenses 31,000

1. What was the cost of raw materials purchased during the year?

2. What was the direct-labor cost charged to production during the year?

3. What was the cost of goods manufactured during the year?

4. What was the cost of goods sold during the year?

Answer 1

Req 1.
Cost of Raw material purchased:
Ending inventory of RM			81000
Add: Consumed during the year			326000
Total Goods available			407000
Less: Beginning Inventory of RM			61000
Material Purchased			346000
Req 2:
Total Manufacturing cost			686000
Less: Material cost			326000
Total Labor and OH cost			360000
Labour cost (360000/160*100)			225000
Req 3:
Cost of Goods manufactured:
Beginning Inventory of WIP				80000
Add: Total Manufacturing Cost
Material			326000
Labouor			225000
OH (225000*60%)			135000	686000
Total Cost of Goods in manufacturing				766000
Less: Ending Inventory of WIP				30000
Cost of Goods manufactured:				736000
Req 4:
Beginning Inventory of FG				90000
Add: Cost of Goods manufactured				736000
Total cost of goods available for sale				826000
Less: Finished Goods ending inventory				110000
Cost f Goods sold				716000