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In: Accounting

Casual Shoe Company makes loafers. During the most recent year, Casual incurred total manufacturing costs of...

Casual Shoe Company makes loafers. During the most recent year, Casual incurred total manufacturing costs of $18,500,000. Of this amount, $2,800,000 was direct material used and $10,800,000 was direct labor. Beginning balances for the year were Direct Materials, $800,000; Work-in-process Inventory, $600,000; and Finished Goods Inventory, $700,000. At the end of the year, balances were direct materials, $700,000; Work-in-process inventory, $1,600,000; and Finished goods inventory, $590,000.

Requirement 1. Analyze the inventory accounts to determine the cost of direct materials purchased during the year.

Direct material used -

Beginning direct materials -

Ending Direct Materials -

Purchases -

Requirement 2. Analyze the inventory accounts to determine the cost of goods manufactured for the year.

Beginning Work-in-Process Inventory

Direct Materials Used

Direct Labor

Manufacturing Overhead

Total Manufacturing Costs Incurred during the Year

Total Manufacturing Costs to Account For

Ending Work-in-Process Inventory

Cost of Goods Manufactured

Requirement 3. Analyze the inventory accounts to determine the cost of goods sold for the year.

Beginning Finished Goods Inventory

Cost of Goods Manufactured

Cost of Goods Available for Sale

Ending Finished Goods Inventory

Cost of Goods Sold

Solutions

Expert Solution

Requirement 1:

As per Question,

Direct Material Used : $2800000

Beginning Direct Material : $ 800000

Ending Direct Material : $ 700000

As Direct Material used during the year = Beginning Direct material + Direct Material Purchased during the year - Ending Direct Material

Therefore, Direct Material purchased = Direct Material used during the year - Beginning Direct material + Ending Direct Material.

Direct Material purchased = $2800000 - $800000 + $ 700000

= $2700000

Requirement 2:

As per Question,

Beginning Work-in-Process Inventory: $600000

Direct Materials Used : $2800000

Direct Labor : $10800000

Total Manufacturing Costs Incurred during the Year : $18500000

Ending Work-in-Process Inventory : $1600000

Therefore,

Manufacturing Overhead = Total manufacturing cost incurred during the year - Direct Labor Cost - Direct Material Cost

= $18500000 - $10800000 - $2800000

= $4900000

Total Manufacturing Costs to Account For = Beginning Work-in-Process Inventory+ Total Manufacturing Cost incurred During the year

= $ 600000 + $18500000

= $19100000

Cost of Goods Manufactured = Total Manufacturing Costs to Account For - Ending Work-in-Process Inventory

= $19100000 - $1600000

= $17500000

Requirement 3:

As per question,

Beginning Finished Goods Inventory: $700000

Cost of Goods Manufactured: $17500000

Ending Finished Goods Inventory: $590000

Therefore,

Cost of Goods Available for Sale = Beginning Finished Goods Inventory + Cost of Goods Manufactured

= $ 700000 + $ 17500000

= $ 18200000

Cost of Goods Sold = Cost of Goods Available for Sale - Ending Finished Goods Inventory

= $ 18200000 - $ 590000

= $ 17610000

ekkarill92 answered 1 year ago

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