The following information is available for Wonderway, Inc., for 2010. Calculate

Question

The following information is available for Wonderway, Inc., for 2010.

 

Calculate the amount for direct materials used (assume all material is direct) for Wonderway. (Omit the "$" sign in your response.)

 

 

 

 

Calculate the amount for manufacturing overhead for Wonderway. (Omit the "$" sign in your response.)

 

 

Calculate the amount for total current manufacturing costs for Wonderway. (Omit the "$" sign in your response.)

 

 

Calculate the amount for cost of goods manufactured for Wonderway. (Omit the "$" sign in your response.)

 

 

Calculate the amount for cost of goods sold for Wonderway. (Omit the "$" sign in your response.)

 

 

 

    Factory rent $28,000     Company advertising 19,000     Wages paid to laborers 83,500     Depreciation for president's vehicle 8,000     Indirect production labor 1,800     Utilities for factory 30,000     Production supervisor salary 30,000     President's salary 60,000     Direct material purchases 32,500     Sales commissions 7,500     Factory insurance 12,000    Depreciation on factory equipment 26,000  

Explanation / Answer

1. Opening Raw Mat Inv $5000 Add: RM purchased $32,500 Less : Clsoing RM Inv $3000 ------------------------------------ Dir Mat used = 34,500 ---------------------------- 2, Calculate the amount for direct labor for Wonderway = 83500 3. Amount for manufacturing overhead for Wonderway Ind Prod Labour 1800 Util for Factory 30000 Prod Sup Salary 30000 Factorty Rent 28000 Dep on Factory 26000 Factory Ins 12000 ------------------------------ Mfg OH = 127,800 4. total current manufacturing costs : Manufacturing costs are generally considered to be the sum of direct materials, direct labor and associated overhead. SO we have DM (=34500) + DL(=83500)+MfgOH(=127800)= 245800...Ans (4) 5. cost of goods manufactured =Total Current Mfg cost + Begining WIP - CLosing WIP = 245800+20000-25000=240800....Ans (5) 6. cost of goods sold : Calculate the subtotal of the beginning inventory, plus cost of direct materials purchased, plus the cost of direct labor. This number is the total goods available for sale during the year. Subtract the ending inventory value for the year from the subtotal you just calculated. The subtotal was the total goods available for sale during the year. This number, after subtracting, is your cost of goods sold. Remember this includes only direct cost of the goods manufactured. So COGS = 37500+34500+83500-45000 = 110,500 7. Period expenses = CO Advtg + Sales comm = 19000+7500=26500 Note : Add inventory that is categorized as "work in process" to total current manufacturing costs to obtain total manufacturing costs.

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