Question

Cost Flow Relationships

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

Sales	$909,300
Gross profit	245,500
Indirect labor	81,800
Indirect materials	33,600
Other factory overhead	15,500
Materials purchased	463,700
Total manufacturing costs for the period	1,003,900
Materials inventory, end of period	33,600

Using the above information, determine the following amounts:

c. Direct labor cost

$

Answer 1

iii) Direct labor cost
	Amount        $
Total manufacturing costs for the period	10,03,900
Less:
Direct materials cost (Calculated below)	3,96,500
Other factory overhead	15,500
Indirect labor	81,800
Indirect materials	33,600
Direct labor cost	4,76,500
Direct materials cost
Materials purchased	4,63,700
Less:
Indirect materials	33,600
Materials inventory, end of period	33,600
Direct materials cost	3,96,500
Cost of goods sold
Sales	9,09,300
Less:
Gross profit	2,45,500
Cost of goods sold	6,63,800
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