The following selected account balances are provided for Delray Mfg Sales Raw ma
ID: 2429809 • Letter: T
Question
The following selected account balances are provided for Delray Mfg Sales Raw materials inventory, Dec. 31, 2016 Work in process inventory, Dec. 31, 2016 Finished goods inventory, Dec. 31, 2016 Raw materials purchases Direct labor Factory computer supplies used Indirect labor Repairs-Factory equipment Rent cost of factory building Advertising expense General and administrative expenses Raw materials inventory, Dec. 31, 2017 Work in process inventory, Dec. 31, 2017 Finished goods inventory $ 1,267,000 42,000 56,900 65,500 167,900 227,000 16,100 54,000 5,250 52,000 102,000 128,000 45,700 40,800 67,500 Dec. 31, 2017Explanation / Answer
***Note: The resaon why only Advertising expense and General and administrative expenses are included in operating expenses is that all factory expenses are already been included in Cost of Goods Manufactured.
DELRAY MFG Schedule of Cost of Goods Manufactured For Year Ended December 31, 2017 Direct material ADD: Opening inventory, Jan 1, 2017 $42,000 Raw material purchases during 2017 $167,900 Raw material available for use $209,900 LESS: Closing inventory, Dec 31, 2017 $45,700 Direct material used $164,200 Direct labor $227,000 Factory overhead Factory computer supplies used $16,100 Indirect labor $54,000 Repairs- Factory equpiment $5,250 Rent cost of factory buliding $52,000 Total factory overhead cost $127,350 Total Manufacturing cost $518,550 ADD: Opening WIP inventory, Jan 1, 2017 $56,900 Total cost of Work in progress $575,450 LESS: Closing WIP inventory, Dec 31, 2017 ($40,800) Cost of goods Manufactured $534,650