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 $7,270,000 1,450,000 330,000 195,000 90,000 5,100,000 Gross profit Indirect labor Indirect materials Other factory overhead Materials purchased Total manufacturing costs for the period 6,170,000 Materials inventory, end of period Using this information, determine the following missing amounts: a. Cost of goods sold b. Direct materials cost GDirect labor cost 480,000 30

Explanation / Answer

a Cost of goods sold = Sales-Gross profit = 7270000-1450000= $582000 b Direct materials cost = 5100000-195000-480000= $4425000 c Direct labor cost = 6170000-4425000-330000-195000-90000= $1130000

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