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A company manufactures jackets and provided you with the following production info for the period: Beginning balance...

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Accounting

A company manufactures jackets and provided you with thefollowing production info for the period:

Beginning balance finished goods............ $120,000

Beginning balance work-in-process.......... $35,000

Beginning balance in raw materials.......... $18

Ending balance in finished goods............. $105,000

Ending balance work-in process............... $37,500

Ending balance raw materials................... $128

Cost of goods manufactured..................... $ 147,500

Manufacturing costs...................................$150,000

Manufacturing overhead............................ $25,000

Direct labor................................................$55,000

A. How much raw material was used during the period?

B. What was the gross margin at the end of the period if thecompany spent $12,500 on advertising and had sales of $360,000?

Answer & Explanation Solved by verified expert
4.0 Ratings (567 Votes)

A Manufacturing Cost $150,000
B Direct labor $55,000
C Manufactring Overhead $25,000
D=A-B-C Raw materials used $70,000
FINISHED GOODS INVENTORY
Debit Credit
Beginning balance $120,000
Cost of goods manufactured $147,500
Cost of goods sold $162,500 (120000+147500-105000)
Ending Balance $105,000
WORK IN PROCESS INVENTORY
Debit Credit
Beginning balance $35,000
Direct Labor $55,000
Manufacturing Overhead $25,000
RawMaterials $        70,000 (150000-55000-25000)
Cost of goods manufactured $147,500
Ending Balance $37,500
RAW MATERIAL INVENTORY
Debit Credit
Beginning balance $18
Raw materials purchased $        70,110 (70000+128-18)
Raw materialsused $ 70,000
Ending Balance $128
A Raw Materials Used $        70,000
B Gross Margin
a Saless $360,000
b Cost of goods sold $162,500
c Advertising expense $12,500
d=b+c Total expense $175,000
e=a-d Gross Margin $185,000

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