Question

The following information comes from the accounting records for Chelsea, Inc., for May. Direct materials inventory, May 1 $ 17,500 Direct materials inventory, May 31 14,700 Work-in-process inventory, May 1 8,300 Work-in-process inventory, May 31 6,000 Finished goods inventory, May 1 54,100 Finished goods inventory, May 31 71,100 Direct materials purchased during May 83,200 Direct labor costs, May 60,300 Manufacturing overhead, May 80,600 Required:

a. Compute the total prime costs for the month of May.

b. Compute the total conversion costs for the month of May.

c. Compute the total manufacturing costs for the month of May.

d. Compute the cost of goods manufactured for the month of May.

e. Compute the cost of goods sold for the month of May.

Answer 1

Direct Materials
Direct Materials purchased	$ 83,200
Add : Beginning Materials Inventory	$ 17,500
Less : Ending Materials Inventory	-$ 14,700
Direct materials used in production	$ 86,000
Direct Labour	$ 60,300
Manufacturing overhead	$ 80,600
Total Manufacturing costs	$ 226,900
Add : Beginning WIP Inventory	$ 8,300
Less : Ending WIP Inventory	-$ 6,000
Cost of Goods Manufactured	$ 229,200
Add: Beginning Finished goods Inventory	$ 54,100
Less : Ending Finished goods Inventory	-$ 71,100
Cost of Goods Sold	$ 212,200

Prime Cost	$ 146,300
Conversion Costs	$ 140,900
Total manufacturing Costs	$ 226,900
Cost of Goods Manufactured	$ 229,200
Cost of Goods Sold	$ 212,200