Question

Fazloen Limited provided the following information for the year ended December 31: Costs incurred: Marketing expense $ 600,000 Depreciation, manufacturing equipment 144,000 Depreciation, office equipment 48,000 Direct labour cost 540,000 Indirect labour $ 337,800 Raw material purchases 792,000 Rent, manufacturing building 480,000 Repairs, manufacturing equipment 240,000 Sales commissions $ 210,000 Supplies, manufacturing 4,200 Utilities, manufacturing 54,000 Inventories: Beginning of Year End of Year Raw materials $ 48,000 $ 60,000 Work in process $ 30,000 $ 120,000 Finished goods $ 420,000 $ 150,000 Required: 1. Calculate the cost of Raw Materials used in Production 2. Calculate the Manufacturing Overheads assuming that Actual Overheads equal Applied Overheads 3. Calculate the Total Manufacturing costs 4. Calculate the cost of Goods Manufactured 5. Calculate the Cost of goods Sold Provide the answers only

Answer 1

The cost of Raw Materials used in Production is $780,000. The total Manufacturing Overheads are $1,260,000. The Total Manufacturing Costs, Cost of Goods Manufactured, and Cost of Goods Sold are $2,580,000, $2,490,000, and $2,760,000, respectively.

Step-by-step explanation:

To calculate the various costs for Fazloen Limited, we use the provided information. Here are the calculations:

• Cost of Raw Materials used in Production: Beginning inventory of Raw materials + Purchases - Ending inventory = $48,000 + $792,000 - $60,000 = $780,000.
• Manufacturing Overheads: Depreciation, manufacturing equipment + Utilities, manufacturing + Rent, manufacturing building + Repairs, manufacturing equipment + Supplies, manufacturing + Indirect Labour = $144,000 + $54,000 + $480,000 + $240,000 + $4,200 + $337,800 = $1,260,000.
• Total Manufacturing Costs: Direct labor cost + Cost of Raw Materials used + Manufacturing Overheads = $540,000 + $780,000 + $1,260,000 = $2,580,000.
• Cost of Goods Manufactured: Total Manufacturing costs + Beginning inventory of Work in process - Ending inventory of Work in process = $2,580,000 + $30,000 - $120,000 = $2,490,000.
• Cost of Goods Sold: Cost of Goods Manufactured + Beginning inventory of Finished Goods - Ending inventory of Finished Goods = $2,490,000 + $420,000 - $150,000 = $2,760,000.