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Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
ISBN: 9781337115773

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BuyFindarrow_forward

Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
ISBN: 9781337115773
Textbook Problem
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Cost of Direct Materials, Cost of Goods Manufactured, Cost of Goods Sold

Bisby Company manufactures fishing rods. At the beginning of July, the following information was supplied by its accountant:

Chapter 2, Problem 53P, Cost of Direct Materials, Cost of Goods Manufactured, Cost of Goods Sold Bisby Company manufactures , example  1

During July, the direct labor cost was $43,500, raw materials purchases were $64,000, and the total overhead cost was $108,750. The inventories at the end of July were:

Chapter 2, Problem 53P, Cost of Direct Materials, Cost of Goods Manufactured, Cost of Goods Sold Bisby Company manufactures , example  2

Required:

  1. 1. What is the cost of the direct materials used in production during July?
  2. 2. What is the cost of goods manufactured for July?
  3. 3. What is the cost of goods sold for July?

1.

To determine

Calculate the amount of direct material used in production for the month of July.

Explanation

Direct Materials Used In Production:

Direct materials used in production determine the variance between the amount of materials used for production and the amount of purchased materials.

Use the following formula to calculate direct material used in production:

Direct materials used in production=(Begining inventory of materials+PurchasesEnding inventory of materials)

2.

To determine

Calculate the amount of cost of goods manufactured for July.

3.

To determine

Calculate the amount of cost of goods sold for July.

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