Conrad, Inc. recently lost a portion of its records in an office fire. The following information was salvaged from the accounting records. Cost of Goods Sold $ 65,000 Work-in-Process Inventory, Beginning 10,500 Work-in-Process Inventory, Ending 9,000 Selling and Administrative Expense 15,000 Finished Goods Inventory, Ending 15,000 Finished Goods Inventory, Beginning? Direct Materials Used? Factory Overhead Applied 12,000 Operating Income 14,000 Direct Materials Inventory, Beginning 11,000 Direct Materials Inventory, Ending 6,000 Cost of Goods Manufactured 60,000 Direct labor cost incurred during the period amounted to 1.5 times the factory overhead. The CFO of Conrad, Inc. has asked you to recalculate the following accounts and to report to him by the end of the day. What is the amount of total manufacturing cost?

Question

Jeremiah

Business

6 February, 23:14

Conrad, Inc. recently lost a portion of its records in an office fire. The following information was salvaged from the accounting records. Cost of Goods Sold $ 65,000 Work-in-Process Inventory, Beginning 10,500 Work-in-Process Inventory, Ending 9,000 Selling and Administrative Expense 15,000 Finished Goods Inventory, Ending 15,000 Finished Goods Inventory, Beginning? Direct Materials Used? Factory Overhead Applied 12,000 Operating Income 14,000 Direct Materials Inventory, Beginning 11,000 Direct Materials Inventory, Ending 6,000 Cost of Goods Manufactured 60,000 Direct labor cost incurred during the period amounted to 1.5 times the factory overhead. The CFO of Conrad, Inc. has asked you to recalculate the following accounts and to report to him by the end of the day. What is the amount of total manufacturing cost?

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Answers (1)

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Monica Hayes · Answer 1

Total manufacturing cost = $60000

Purchase Direct Material = $23500

Ending finished inventory = $10000

Explanation:

Giving the following information, we need to calculate the amount of manufacturing cost:

Cost of Goods Sold $ 65,000

Beginning Work-in-Process 10,500

Ending Work-in-Process 9,000

Selling and Administrative Expense 15,000

Finished Goods Inventory, Ending 15,000

Finished Goods Inventory, Beginning?

Direct Materials Used?

Factory Overhead Applied 12,000

Operating Income 14,000

Direct Materials Inventory, Beginning 11,000

Direct Materials Inventory, Ending 6,000

Cost of Goods Manufactured 60,000

Direct labor cost incurred during the period amounted to 1.5 times the factory overhead

We know that:

To calculate the cost of manufactured goods we need to use the following formula:

Cost of good manufactured = Beginning work in progress + (beginning inventory direct material + purchase direct material - ending inventory direct material) + direct labor + manufactured overhead - ending work in progress

60000=10500 + (11000 + purchase direct material - 6000) + (1,5*12000) + 12000 - 9000

purchase direct material = 60000 - 10500 - 11000 + 6000 - 18000 - 12000 + 9000 = $23500

We also know:

COGS=Beginning Inventory+Production during period-Ending Inventory

65000=15000 + 60000 - ?

Ending Inventory = 15000 + 60000 - 65000 = 10000