The following information is available for the first month ofoperations of Korv
ID: 2457819 • Letter: T
Question
The following information is available for the first month ofoperations of Korv Inc., a manufacturer of art and craft items:
Sales 775,000
Grossprofit 265,000
Indirectlabor 63,000
Indirectmaterials 32,000
Other factoryoverhead 17,500
Materialspurchased 303,000
Total manufacturing costs for theperiod 620,000
Materials inventory, end ofperiod 35,000
b. Direct materials cost
c. Direct labor cost
(Note: (c)$271,500
Explanation / Answer
Materials
WIP
Purchase 303,000
Mat used 268,000
268,000
D.lab 271,500
O/H 80,500
35,000
1. Cost of goods sold - Correct per theprevious poster.
2. Direct materials cost - 303,000 – 32,000 =271,000
3.D.labor - Total manufacturing cost is 620,000
620,000 – 268,000 – 80,500 = 271,500.
Materials
WIP
Purchase 303,000
Mat used 268,000
268,000
D.lab 271,500
O/H 80,500
35,000
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