Gibson Manufacturing Company began operations on January 1. During the year, it
ID: 2525602 • Letter: G
Question
Gibson Manufacturing Company began operations on January 1. During the year, it started and completed 1,690 units of product. The financial statements are prepared in accordance with GAAP. The company incurred the following costs: Raw materials purchased and used—$3,070. Wages of production workers—$3,610. Salaries of administrative and sales personnel—$1,975. Depreciation on manufacturing equipment—$4,981. Depreciation on administrative equipment—$1,765. Gibson sold 1,130 units of product.
Required
Determine the total product cost for the year.
Determine the total cost of the ending inventory. (Do not round intermediate calculations.)
Determine the total of cost of goods sold. (Do not round intermediate calculations.)
Explanation / Answer
1 Raw materials used 3070 Wages of production workers 3610 Depreciation on manufacturing equipment 4981 Total product cost for the year 11661 2 Total cost of the ending inventory = 11661/1690*560= $3864 3 Total of cost of goods sold = 11661/1690*1130= $7797
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