Champagne of the South, Inc., a manufacturer of bottled sweet tea, had the following beginning and ending inventories for the year ended December 31, 2013: January 1 December 31 Raw Materials Inventory * $10,000 $1 comma 702 Work in Process Inventory $17 comma 895 $17,000 Finished Goods Inventory $21,000 $16,500 *Raw Materials Inventory consists of both direct material and indirect material. During the year, direct labor costs of $30,000 were incurred, manufacturing overhead totaled $42,000, materials purchased were $27,000, and selling and administrative costs were $22,000. Champagne sold 25,000 units of product during the year at a sales price of $5.00 per unit. What were the total manufacturing costs for the year assuming $2 comma 129 of indirect materials were used during the period

Question

Jimena Carson

Business

23 November, 02:39

Champagne of the South, Inc., a manufacturer of bottled sweet tea, had the following beginning and ending inventories for the year ended December 31, 2013: January 1 December 31 Raw Materials Inventory * $10,000 $1 comma 702 Work in Process Inventory $17 comma 895 $17,000 Finished Goods Inventory $21,000 $16,500 *Raw Materials Inventory consists of both direct material and indirect material. During the year, direct labor costs of $30,000 were incurred, manufacturing overhead totaled $42,000, materials purchased were $27,000, and selling and administrative costs were $22,000. Champagne sold 25,000 units of product during the year at a sales price of $5.00 per unit. What were the total manufacturing costs for the year assuming $2 comma 129 of indirect materials were used during the period

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Ashlynn Ryan · Answer 1

total manufacturing cost added for the period 105,169

Cost of goods manufactured 106,064

Cost of goods sold 110,564

Explanation:

First, we need to know the amount of direct materials used in production.

beginning raw materials 10,000

purchase 27,000

ending (1,702)

indirect materials (2,129)

direct materials 33,169

now, we calculate the cost added during the period

direct materials 33,169

direct labors 30,000

overhead 42,000

total cost added 105,169

next step, we calculate the cost of goods manufactured from the WIP

WIP 17,895

added 105,169

WIP ending (17,000)

COGM 106,064

And last, the cost of goods sold

beginning finished goods 21,000

COGM 106,064

ending finished goods (16,500)

COGS 110,564