Cost of Goods Manufactured Slapshot Company makes ice hockey sticks. During the
ID: 2331007 • Letter: C
Question
Cost of Goods Manufactured
Slapshot Company makes ice hockey sticks. During the month of June, the company purchased $123,000 of materials. Also during the month of June, Slapshot Company incurred direct labor cost of $157,000 and manufacturing overhead of $204,000. Inventory information is as follows:
Required:
1. Calculate the cost of goods manufactured for the month of June.
$
2. Calculate the cost of one hockey stick assuming that 1,900 sticks were completed during June. Round your answer to the nearest cent.
$per hockey stick
Explanation / Answer
Q. 1)
Material consumed = June 1 stock + Purchase – June 30 stock
= 48,000 + 123,000 – 45,000
= 126,000
Prime cost = Material consumed + Direct labor
= 126,000 + 157,000
= 283,000
Cost of goods manufactured = Prime cost + Manufacturing overhead + June 1 work-in-process – June 30 work-in-process
= 283,000 + 204,000 + 65,000 – 63,000
= $489,000 (Answer)
Q. 2)
Cost of one stick = Cost of goods manufactured / Number of units
= $489,000 / 1,900
= 257.37 (Answer)