The following information comes from the accounting records for Chelsea, Inc., f

Question

The following information comes from the accounting records for Chelsea, Inc., for May:  

  

Required:

a. Compute the total prime costs for the month of May.

  

b. Compute the total conversion costs for the month of May.

c. Compute the total manufacturing costs for the month of May.

  

d. Compute the cost of goods manufactured for the month of May.

  

e. Compute the cost of goods sold for the month of May.

  

Direct materials inventory, May 1 $ 18,100 Direct materials inventory, May 31 15,700 Work-in-process inventory, May 1 8,500 Work-in-process inventory, May 31 6,600 Finished goods inventory, May 1 54,200 Finished goods inventory, May 31 72,400 Direct materials purchased during May 84,900 Direct labor costs, May 59,000 Manufacturing overhead, May 79,700

Explanation / Answer

Answer:- a)-Total prime costs= Direct material costs+ Direct Labor costs

                                             =$87300+$59000 =$146300

Total material used= Opening inventory+Material purchased-Closing inventory

                                  =$18100+$84900-$15700 = $87300

b)- Total conversion costs=Direct labor costs+manufacturing overhead

                                         =$59000+$79700 =$138700

c)-Total manufacturing costs=Prime costs+Conversion costs

                                             =$146300+$138700 = $285000

d)-Cost of goods manufactured= Manufacturing Cost + Beginning Work in Process
Ending Work in Process

=$285000+$8500-$6600 =$293500-$6600 = $286900

e)Cost of goods sold=Opening finished goods inventory+ Cost of goods manufactured-Closing finished goods inventory

=$54200+$286900-$72400 =$341100-$72400 =$268700

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