Thanks God, that I founded you through Facebook! As for the problem from Manager

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Thanks God, that I founded you through Facebook!
As for the problem from Managerial Accounting, I am lost to beginwith... but I would appreciate if you could help me with thisexercise =/

The following info. is available for the first month of operationsof 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 o/h - 17,500
Materials purchased - 303,000
Total manufacturing costs for the period - 620,000
Materials inventory, end of period - 35,000

By using the above info, determine the following missingamounts:

(a) COGS ?
(b) DM cost ?
(c) DL cost ?

Please help! Thanks in advance!

Explanation / Answer

(a) COGS   =   TotalManufacturing Cost - Total Overhead cost                   =   $620,000   - ($63,000+ $32,000+ $17,500)     =   $507,500 (b) DMcost    =      MaterialsPurchased    -   EndingMaterials Inventory   -   IndirectMaterials                       =      $303,000      -      $35,000   -   $32,000                      =       $236,000      
(c) DLcost      =      COGS   -   DMcost      
(c) DLcost      =      COGS   -   DMcost                         =      $507,500   -   $236,000                         =      $271,500
               

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