E8.8 (LO 3), AN Antonio is evaluating some of last year’s manufacturing costs for his business, Work It Out, which creates custom-fit exercise equipment for high-end clients. He is trying to strengthen his own analytical skills by looking at some of the total cost amounts and working backward to make sure he can find the detailed amounts that comprised these totals. Last year’s manufacturing costs are as follows. Total manufacturing costs $580,000 Total applied MOH (based on an MOH rate of $1.80/DL dollar) 270,000 Total cost of goods completed 630,000 Beginning balance in WIP Inventory 56,000 Required a. How much direct labor cost was incurred last year? b. What was the cost of direct materials used? c. What was the ending balance in WIP Inventory last year
E8.8 (LO 3), AN Antonio is evaluating some of last year’s
Total manufacturing costs $580,000
Total applied MOH (based on an MOH rate of $1.80/DL dollar) 270,000
Total cost of goods completed 630,000
Beginning balance in WIP Inventory 56,000
Required
a. How much direct labor cost was incurred last year?
b. What was the cost of direct materials used?
c. What was the ending balance in WIP Inventory last year?
d. If FG Inventory had no ending balance but Cost of Goods Sold was $675,000, what was the beginning balance in FG Inventory last year?
e. Given the company’s goal to generate a 65% gross margin on these products, how much revenue did the company need to earn on its COGS of $675,000 in order to reach its goal?
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