BuyFindarrow_forward

Survey of Accounting (Accounting I)

8th Edition
Carl Warren
ISBN: 9781305961883

Solutions

Chapter
Section
BuyFindarrow_forward

Survey of Accounting (Accounting I)

8th Edition
Carl Warren
ISBN: 9781305961883
Textbook Problem

Cost flow relationships
The following information is available for the first month of operations of Lane Inc., a manufacturer of art and craft items:


Using the above information, determine the following:
a.Cost of goods sold
b.Direct materials cost
c. Direct labor cost

To determine

Concept Introduction:

Direct and Indirect Costs:

Manufacturing costs can be divided into two types; Direct costs and Indirect costs. Direct costs are easily traceable with the product like direct material and direct labor and indirect costs are not traceable easily like indirect material indirect labor and overheads.

Manufacturing overhead costs:

Manufacturing overhead cost is the pool of all indirect costs incurred for the production. These are the costs which are not directly traceable to the product. Manufacturing costs include indirect material indirect labor and overheads.

To Calculate:

The Cost of Goods Sold, Direct material Cost, and Direct labor cost

Explanation

The Cost of Goods Sold, Direct material Cost, and Direct labor cost are calculated as follows:

    Sales (A) $ 750,000
    Gross Profit (B) $ 240,000
    Cost of Goods Sold (C) = (A-B)$ 510,000
    Material Purchased (D) $ 400,000
    Material inventory at the end of the period (E) $ 50,000
    Direct Material Cost (F) = (D-E)$ 350,000

Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

Additional Business Solutions

Find more solutions based on key concepts

Show solutions add

PAYBACK PERIOD Refer to Problem 11-1. What is the projects payback?

Fundamentals of Financial Management (MindTap Course List)

What does the invisible hand of the marketplace do?

Brief Principles of Macroeconomics (MindTap Course List)

REQUIRED RATE OF RETURN Stock R has a beta of 1.5, Stock S has a beta of 0.75, the required return on an averag...

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)