Question

Cost Flow Relationships

The following information is available for the first year of operations of Engle Inc., a manufacturer of fabricating equipment:

Sales	$912,800
Gross profit	246,500
Indirect labor	82,200
Indirect materials	33,800
Other factory overhead	15,500
Materials purchased	465,500
Total manufacturing costs for the period	1,007,700
Materials inventory, end of period	33,800

Using the above information, determine the following missing amounts:

a. Cost of goods sold	$fill in the blank 1
b. Direct materials cost	$fill in the blank 2
c. Direct labor cost	$fill in the blank 3

Answer 1

ANSWER:

a.	Cost of goods sold: Sales……………………………………………………………	$912,800
	Less gross profit……………………………………………	246,500
	Cost of goods sold…………………………………………	$666,300

b.	Direct materials cost:
	Materials purchased…………………………………………		$465,500
	Less:   Indirect materials……………………………………	$ 33,800
	Materials inventory…………………………………	33,800	67,600
	Direct materials cost………………………………………		$397,900

c.	Direct labor cost:
	Total manufacturing costs for the period………………		$1,007,700
	Less:   Direct materials cost………………………………	$397,900
	Factory overhead*…………………………………	131,500	529,400
	Direct labor cost……………………………………………		$478,300

*$82,200 +$33,800 + $15,500