Question

The following information relates to Stevens Company for June 20XX:

Direct materials inventory, beginning balance $ 7,000

Direct materials inventory, ending balance 3,000

Work-in –process inventory, beginning balance 5,000

Work-in-process inventory, ending balance 8,000

Finished goods inventory, beginning balance 10,000

Finished goods inventory, ending balance 12,000

Direct Labor 48,000

Direct materials purchases 26,000

Indirect labor 6,000

Depreciation: factory equipment 11,000

Depreciation: office equipment 4,000

Insurance, factory 3,000

Advertising expense 8,000

Repair and maintenance, factory 5,000


Question 1: (1.0 point) Required: Calculate the total factory overhead costs. Omit $ signs.

Question 2: (1.0 point) Required: Calculate the cost of goods manufactured. Omit $ signs.

Question 3: (1.0 point) Required: Calculate the cost of goods sold. Omit $ signs.

Answer 1

Question 1). Solution :- Total factory overhead costs = Indirect labor + Depreciation (factory equipment) + Insurance (factory) + Repair and maintenance (factory).

= 6000 + 11000 + 3000 + 5000.

= $ 25000.

Question 2). Solution :- Cost of goods manufactured = Direct material used in production + Direct labor + Factory overhead costs + Work in process at the beginning - Work in process at the end.

= 30000^(Note) + 48000 + 25000 + 5000 - 8000

= $ 100000.

Note :- Direct material used in production = Beginning balance of Direct material inventory + Purchase of direct material - Ending balance of Direct material inventory.

= 7000 + 26000 - 3000

= $ 30,000.

Question 3). Solution :- Cost of goods sold = Beginning inventory of finished goods + Cost of goods manufactured - Ending inventory of finished goods.

= 10000 + 100000 - 12000

= $ 98000.

Conclusion :-

Question 1). Total factory overhead costs	$ 25000.
Question 2). Cost of goods manufactured	$ 100000.
Question 3). Cost of goods sold	$ 98000.