Question

Direct Materials Used, Cost of Goods Manufactured In September, Lauren Ashley Company purchased materials costing $220,000...

Direct Materials Used, Cost of Goods Manufactured

In September, Lauren Ashley Company purchased materials costing $220,000 and incurred direct labor cost of $130,000. Overhead totaled $360,000 for the month. Information on inventories was as follows:

September 1 September 30
Materials $140,000 $150,000
Work in process $70,000 $80,000
Finished goods $75,000 $60,000

Required:

1. What was the cost of direct materials used in September ?

2. What was the total manufacturing cost in September ?

3. What was the cost of goods manufactured for September ?

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Answer #1


September 1

September 30

Materials

$140,000

$150,000

Work in process

$70,000

$80,000

Finished goods

$75,000

$60,000

Material purchases = $220,000

Direct labor cost = $130,000

Overhead totaled = $360,000

1.

Direct materials used in September = Materials, sept 1 + Material purchases - Material, sept 30

= 140,000 + 220,000 - 150,000

= $210,000

2.

Total manufacturing cost in September = Direct materials used + Direct labor cost + Overhead totaled

= 210,000 + 130,000 + 360,000

= $700,000

3.

cost of goods manufactured for September = Total manufacturing cost in September + Work in process, sept 1 - Work in process, sept 30

= 700,000 + 70,000 - 80,000

= $690,000

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