Question

Olivia’s Outdoor Essentials produces gear for climbing, hiking, and camping. Last month, Olivia reported the following: Beginning Work in Process Inventory: $20,000 Ending Work in Process Inventory: $25,000 Beginning Finished Goods Inventory: $15,000 Ending Finished Goods Inventory: $13,000 Direct Labor: $60,000 Beginning Raw Materials Inventory: $20,000 New Raw Materials Purchased: $48,000 Ending Raw Materials Inventory: $10,000 Indirect Materials Used: $8,000 Indirect Labor: $10,000 Other Applied Manufacturing Overhead: $30,000

Required:

a. What was the Manufacturing Costs for the period?

b. What was the Cost of Goods Manufactured for the period?

c. What was the Cost of Goods Sold for the period?

Answer 1

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	Direct materials costs
	-Beginning inventory		$ 20,000
	- Purchases of direct materials		$ 48,000
	-Cost of direct materials available for use		$ 68,000
	Ending inventory		$-10,000
	Material used		$ 58,000
	Less: Indirect Material used		$ -8,000
	Direct Material Used			$ 50,000
	Direct Labor			$ 60,000
	Manufacturing Overheads			$ 48,000
	Manufacturing costs incurred			$158,000
	Add beginning work-in-process inventory			$ 20,000
a	Total Manufacturing Cost			$178,000
	Less Ending WIP			$ -25,000
b	Cost of Goods Manufactured			$153,000
	Add: Beginning Finished Goods Inventory			$ 15,000
	Cost of Goods Available for Sale			$168,000
	Less: Ending Finished Goods Inventory			$ -13,000
c	Cost of Goods Sold			$155,000