Cost Flow Relationships The following information is available for the first yea

Question

Cost Flow Relationships The following information is available for the first year of operations of Engle Inc, a manufacturer of fabricating equipment Sales Gross profit Indirect labor Indirect materials Other factory overhead Materials purchased Total manufacturing costs for the period Materials inventory, end of period $859,300 232,000 77,300 31,800 14,600 438,200 948,700 31,800 Using the above information, determine the following missing amounts: a. Cost of goods sold b. Direct materials cost c. Direct labor cost

Explanation / Answer

a Cost of goods sold = Sales-Gross profit =859300-232000= $627,300 b Direct materials cost = Materials purchased -Materials inventory, end of period-Indirect Material =438200-31800-31800= $374,600 c Direct labor cost = Total Manufacturing Cost-Direct Material Cost-Indirect Labour- Indirect Material-Other Factory Overhead =948700-374600-77300-31800-14600= $450,400

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