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:

Factory overhead was applied during the year. Using the above information, determine the following missing amounts:

Sales $1,114,800 Gross profit 301,000 Indirect labor 100,300 Indirect materials 41,200 Other factory overhead 19,000 Materials purchased 568,500 Total manufacturing costs for the period 1,230,700 Materials inventory, end of period 41,200

Explanation / Answer

a Cost of goods sold = Sales-Gross profit = 1114800-301000= $813800 b Direct materials cost = Materials purchased -Materials inventory, end of period = 568500-41200= $527300 c Direct labor cost = 1230700-527300-100300-41200-19000= $524900

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