Question

                          January 1, 2020        December 31, 2020
Direct materials               31,000                   50,000
Work in process                38,000                   41,000
Finished goods                 22,000                   34,000

The following information was taken from DTD Company's accounting records
for 2020:

Sales revenue ...........................................   $630,000
Direct materials purchased ..............................       ?
Depreciation, factory equipment .........................     34,000
Prime costs .............................................    250,000
Utilities (60% for factory; 40% for office building) ....     20,000
Sales commissions .......................................     71,000
Indirect materials ......................................       ?
Depreciation, office equipment ..........................     30,000
Rent, factory building ..................................     56,000
Net income ..............................................     10,000
Direct labor ............................................       ?
Advertising .............................................     68,000
Production supervisor's salary ..........................     74,000

Additional information:

1.  Direct labor comprised 35% of the conversion costs for 2020.

2.  The actual overhead cost for 2020 was equal to the overhead applied
    to production. Thus there was no overhead variance for 2020.

Calculate DTD Company's indirect materials cost for 2020.

Answer 1

Calculate DTD Company's indirect materials cost for 2020.

Sales revenue		630000
Net income	10000
Add: Advertising	68000
Add: Depreciation office equipment	30000
Add: Sales commissions	71000
Add: Utilities for office building (20,000 x 40%)	8000
Gross profit		187000
Cost of goods sold		443000
Add: Finished goods, December 31, 2020		34000
Cost of goods available for sale		477000
Less: Finished goods, January 1, 2020		22000
Cost of goods manufactured		455000
Add: Work in process, December 31, 2020		41000
Total manufacturing costs incurred		496000
Less: Work in process, January 1, 2020		38000
Manufacturing costs incurred during 2020		458000
Less: Prime costs		250000
Manufacturing overhead costs for 2020		208000
Depreciation, factory equipment	34000
Utilities for factory (20,000 x 60%)	12000
Rent, factory building	56000
Production supervisor's salary	74000
Total overhead other than indirect materials		176000
Indirect materials cost for 2020		32000

DTD Company's indirect materials cost for 2020 is $32,000.