The following information is available for the first month of operations of Korv

Question

The following information is available for the first month of operations of Korv Inc., a manufacturer of art and craft items:
Sales $775,000
Gross profit $ 265,000
Indirect labor 63,000
Indirect materials 32,000
Other factory overhead 17,500
Materials purchased 303,000
Total Manufacturing costs for the period 620,000
Materials inventory, end of period 35,000

Using the above information, determine the following missing amounts:
A. cost of goods sold
B. Direct materials cost
C. Direct labor cost
D. Factory Overhead

Chart
Enter the labels and amounts required to complete the following three schedules
Cost of Goods Sold
Column A Column B
Sales $775,000
Less: Gross profit 265,000
Cost of Goods Sold $510,000

Direct Materials Cost
Materials purchased $303,000
Less: Indirect materials $ 32,000
Materials inventory 35,000 67,000
Direct materials cost $236,000

Direct Labor Cost
Total manufacturing costs 620,000
Less: Direct materials cost $236,000
Factory overhead
Direct labor cost $271,500

Explanation / Answer

a.) Cost Sales 775,000 Less Gross Profit 265,000 510,000 b.) Direct materials cost Purchases 303,000 Less ending balance 35,000 268,000 c.) Direct labor cost Total Manufacturing cost 620000 Less Indirect labor 63000 Indirect materials 32000 Other factory overhead 17500 Material Cost 268,000 239,500

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