Erdkamp Corporation incurred the following costs while manufacturing its product
ID: 2546702 • Letter: E
Question
Erdkamp Corporation incurred the following costs while manufacturing its product.
Materials used in product $120,000
Advertising expense $45,000
Depreciation on plant $60,000
Property taxes on plant $19,000
Property taxes on store $7,500
Delivery expense $21,000
Labor costs of assembly-line workers $110,000
Sales commissions $35,000
Factory supplies used $23,000
Salaries paid to sales clerks $50,000
Work-in-process inventory was $22,000 at January 1 and $15,500 at December 31. Finished goods inventory was $65,000 at January 1 and $50,600 at December 31.
Instructions
(a) Compute cost of goods manufactured statement.
(b) Compute cost of goods sold.
Please show work.
Explanation / Answer
Statement showing cost of goods manufactured Particulars Amount ($) Materials Cost 120000 Depreciation 60000 Labour cost of assemly -Line workers 110000 Total manufacturing cost 290000 Cost of goods sold = Opening stock + Purchases -Closing stock Opening stock $65,000 Purchases 0 Closing stock $50,600 Cost of goods sold $14,400
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