. Compute cost of direct labor used.2. Compute cost of direct materials used.3. Compute cost of goods manufactured.4. Compute cost of goods sold. (Do not consider any underapplied or overapplied overhead.)

Answer :

anthougo

1. The computation of the direct labor used is as follows:

Factory Payroll (paid with cash): $57,000

Indirect labor: $7000

Direct labor = $50,000 ($57,000 - $7,000)

2. The computation of the direct materials used is as follows:

Raw Materials, November 30: $10,000

Raw materials purchases          40,000

Raw Materials, December 31: $12,000

Raw materials used = $38,000 ($10,000 + $40,000 = $12,000)

Indirect materials: $5,000

Direct materials used = $33,000 ($38,000 - $5,000)

3. The computation of the cost of goods manufactured is as follows:

Work in process, November 30:  $15,000

Direct materials                               33,000

Direct labor                                     50,000

Manufacturing overhead applied  35,000 ($50,000 x 70%)

Work in process, December 31: ($20,000)

Cost of goods manufactured   $113,000

4. The computation of the cost of goods sold is as follows:

Finished goods, November 30:   $7,500

Cost of goods manufactured    $113,000

Finished goods, December 31: ($10,000)

Cost of goods sold                  $110,500

Question Completion:

As consultants, we are hired to help the company track and report costs. The following Tableau Dashboard is provided to assist us in our analysis.

INVENTORIES:

Raw Materials, November 30: $10,000

Raw Materials, December 31: $12,000

Work in process, November 30: $15,000

Work in process, December 31: $20,000

Finished goods, November 30: $7,500

Finished goods, December 31: $10,000

FACTORY OVERHEAD:

Indirect materials: $5,000

Indirect labor: $7,000

Other overhead costs: $30,000

Total Overhead: $42,000

SALES, MATERIALS, AND PAYROLL FOR DECEMBER

Factory Payroll (paid with cash): $57,000

Raw materials purchases (paid with cash): $40,000

Sales (received in cash): $200,000

PREDETERMINED OVERHEAD RATE

Predetermined overhead rate based on direct labor cost: 70%

Thus, the cost of goods manufactured is $113,000.

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