Answer:
Step-by-step explanation:
Problem 3.7A
Northwest Company manufactures a single product. Selected data for the first quarter of the current year are as follows:
Sales ........................ $90,000
Cost of goods sold ............ 42,000
Gross margin ................. $48,000
Selling and administrative expenses ............ 28,000
Net operating income ............ $20,000
In addition, the following information is available:
a. During the first quarter, ending inventories of finished goods were $6,000 more than beginning inventories.
b. Cost of goods sold for the first quarter was composed of $40,000 of direct materials cost, $12,000 of direct labor cost, and $30,000 of manufacturing overhead cost.
Required:
Compute the cost of goods manufactured for the first quarter.
Solution
Cost of Goods Manufactured = Beginning Finished Goods Inventory + Cost of Goods Sold - Ending Finished Goods Inventory
Cost of Goods Manufactured = $0 + $42,000 - $6,000
Cost of Goods Manufactured = $36,000
Therefore, the cost of goods manufactured for the first quarter is $36,000. This can be further broken down into $40,000 of direct materials cost, $12,000 of direct labor cost, and $30,000 of manufacturing overhead cost, as given in the information.