Select your language

Suggested languages for you:
Log In Start studying!
Answers without the blur. Just sign up for free and you're in → Illustration

Q38PGB

Expert-verified
Horngren'S Financial And Managerial Accounting
Found in: Page 902

Short Answer

Determining the flow of costs through a manufacturer’s inventory accounts

True Fit Shoe Company makes loafers. During the most recent year, True Fit incurred total manufacturing costs of $21,900,000. Of this amount, $2,600,000 was direct materials used and $14,800,000 was direct labor. Beginning balances for the year were Direct Materials, $700,000; Work-in-Process Inventory, $1,500,000; and Finished Goods Inventory, $1,100,000. At the end of the year, balances were Direct Materials, $800,000; Work-in-Process Inventory, $2,000,000; and Finished Goods Inventory, $1,080,000.

Requirements Analyze the inventory accounts to determine:

1. Cost of direct materials purchased during the year.

2. Cost of goods manufactured for the year.

3. Cost of goods sold for the year.

The purchase of direct materials is $2,700,000, the cost of goods manufactured is $21,400,000 and the cost of goods sold is $21,420,000.

See the step by step solution

Step by Step Solution

Step-by-Step Solution Step 1: Calculation of cost of direct materials purchased

Step 2: Calculation of cost of goods manufactured

Step 3: Calculation of cost of goods Sold

Icon

Want to see more solutions like these?

Sign up for free to discover our expert answers
Get Started - It’s free

Recommended explanations on Business-studies Textbooks

94% of StudySmarter users get better grades.

Sign up for free
94% of StudySmarter users get better grades.