*InventoryIf the beginning balancefor May of the materials inventory account was $27,500, the ending balance for May is $28,750, and $128,900 of materials were used during the month, the materials purchased during the month cost130,150 ( Beg – Used- Ending = Amt Purchased )Answer D is correct.Purchases equals usage adjusted for the inventory change. Hence, purchases equals $130,150 ($128,900 used – $27,500 BI + $28,750 E*Cost of Goods Manufactured and COGSThe following information was taken from last year’s accounting records of a manufacturing company.InventoryJanuary1December31Raw materials$38,000$ 45,000Work-in-process21,00010,000Finished goods78,000107,000Other informationDirect labor$236,000Shipping costs on outgoing orders6,500Factory rent59,000Factory depreciation18,700Advertising expense24,900Net purchases of raw materials115,000Corporate administrative salaries178,000Material handling costs35,800On the basis of this information, the company’s cost of goods manufactured and cost of goods sold are D. $468,500 and $439,500, respectively.Answer D is correct.This solution requires a series of computations.Beginning raw materials$ 38,000Add: Net purchases raw materials$115,000Materials available$153,000Less: Ending materials(45,000)Materials used in production$108,000Direct labor236,000Manufacturing overheadFactory rent$59,00
0Factory depreciation18,700Material handling costs+35,800Total Manufacturing overhead=113,500Total manufacturing costs$457,500Add: Beginning work-in-process21,000Less: Ending work-in-process(10,000)Costs of Goods Manufactured$468,500Add: Beginning finished goods78,000Less: Ending finished goods(107,000)Cost of Goods Sold$439,500An entity had the following opening and closing inventory balances during the current year:1/112/31Finished goods$90,000$260,000Raw materials105,000130,000Work-in-progress220,000175,000The following transactions and events occurred during the current year:$300,000 of raw materials were purchased, of which $20,000 were returned because of defects.$600,000 of direct labor costs were incurred.$750,000 of production overhead costs were incurred.The cost of goods sold for the current year ended December 31 would be-1,480,000Beginning Raw Materials$105,000Purchases during the period300,000(Returns)(Ending direct materials inventory) (130,000)(20,000)
= Direct materials used in production$255,000Direct labor costs600,000Manufacturing overhead costs (fixed + variable)750,000= Total manufacturing costs$1,605,000Beginning work-in-process inventory220,000(Ending work-in-process inventory)(175,000)= Cost of goods manufactured$1,650,000Beginning finished goods inventory90,000(Ending finished goods inventory)(260,000)= Cost of goods sold$1,480,000A company incurred $200,000 of manufacturing cost during the month, with a beginning finished goods inventory of $20,000 and an ending finished goods inventory of $15,000. Assuming no work-in-process inventories, the company’s cost of goods sold was-205,000*Stmt of cash flow Below are the balances for the following accounts on the balance sheet of a company as of the end of Year 20X2 and Year 20X1.