Need help with an accounting problem.?

Question

Hi Folks, 

I am having trouble with a problem from my managerial accounting class. I would love to get some help on it as I just cannot seem to figure it out:

-----------------------------------------------------------------------------------------------------------------------------------------
The following information is available for the first month of operations of Enders Company, a manufacturer of mechanical pencils:

Sales: $630,000
Gross Profit: $370,000
Cost of Goods Manufactured: $315,000
Indirect Labor: $84,000
Factory Depreciation: $22,000
Total Manufacturing Costs for the Period: $362,000
Materials Inventory: $22,000

Using the above information, determine the following missing amounts:

a. Cost of Goods Sold
b. Finished Goods Inventory
c. Direct Materials Cost
d. Direct Labor Cost
e. Work In Process Inventory

-------------------------------------------------------------------------------------------------------------------

I think I have "a" and "c" figured out. I think "a" is $260,000 and "c" is $186,000.

Any help or guidance on this problem would be much appreciated.

Ahmed Jamal · Accepted Answer

Cost of Goods Sold= Sales- Gross Profit
Cost of Goods Sold= 630000 - 370000
Cost of Goods Sold= 260000

Finished Goods Inventory (Opening - Closing) = Cost of Goods Manufactured- Cost of Goods Sold
Finished Goods Inventory= 315000- 260000
Finished Goods Inventory= 55000

Direct Material Cost= 22000


Direct Labor Cost= Total Manufacturing cost for the period - Indirect Labor - Factory Depreciation - Material Inventory
Direct Labor Cost= 362000 - 84000 - 22000 - 22000
Direct Labor Cost= 234000

Work In process Inventory= Total Manufacturing Cost for the period - Cost of Goods Manufactured
Work in process Inventory= 362000- 315000
Work in process Inventory= 47000

Trending News

Need help with an accounting problem.?

1 Answer