The following information is available for SafeLife Company, which produces spec
ID: 2428255 • Letter: T
Question
The following information is available for SafeLife Company, which produces special-order security products and uses a job order cost accounting system.
April 30
May 31
Inventories
Raw materials
$
27,000
$
41,000
Goods in process
9,000
20,600
Finished goods
70,000
33,000
Activities and information for May
Raw materials purchases (paid with cash)
183,000
Factory payroll (paid with cash)
500,000
Factory overhead
Indirect materials
6,000
Indirect labor
74,000
Other overhead costs
95,500
Sales (received in cash)
1,500,000
Predetermined overhead rate based on direct labor cost
55
%
Compute the following amounts for the month of May. (Omit the "$" sign in your response.)
1.
Cost of direct materials used.
$
2.
Cost of direct labor used.
$
3.
Cost of goods manufactured. (PLEASE EXPLAIN THIS ANSWER)
$
4.
Cost of goods sold.*
$
5.
Gross profit.
$
The following information is available for SafeLife Company, which produces special-order security products and uses a job order cost accounting system.
Explanation / Answer
1.Cost of Directmaterials used Raw materials at the beginning $27,000 Raw materials purchased during the year $183,000 Raw materials available for use $210,000 Less:Raw materials balance at the end $41,000 Raw materials consumed duringthe year $169,000 2.Direct labor(factory payrolls) $500,000 Factory overheads: indirect materials $6,000 indirect labor $74,000 other overheads $95,500 $175,500 3.Cost of goods manufactured Goods in process-opening balance $9,000 Direct materials used $169,000 Direct labor $500,000 Fctory overheads $175,500 $853,500 Less: Goods in process-ending $20,600 Cost of goods manufactured $832,900 4.Cost of goods sold Finished goods inventory at thebeginning $70,000 Cost of goods manufactured $832,900 Goods available for sale $902,900 Less:Finished goods inventory at the end $33,000 Costof goods sold $869,900 5. Sales $1,500,000 Less: cost of goods sold $869,900 Gross profit $630,100
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