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Cost Flow Relationships The following information is available for the first year of operations of Creston Inc.,...

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Accounting

Cost Flow Relationships

The following information is available for the first year ofoperations of Creston Inc., a manufacturer of fabricatingequipment:

Sales$909,300
Gross profit245,500
Indirect labor81,800
Indirect materials33,600
Other factory overhead15,500
Materials purchased463,700
Total manufacturing costs for the period1,003,900
Materials inventory, end of period33,600

Using the above information, determine the followingamounts:

c. Direct labor cost$

Answer & Explanation Solved by verified expert
3.8 Ratings (489 Votes)

Answer:

a. Cost of Goods sold
Genreally cost of goods sold = Opening inventory +Purchase during the year -closing inventory
or
COGS = Sales - Gross profit
It will be calculated as follows:
Particulars Amount $
Sales 909300
Less: Gross Profit      245500
Cost of goods sold      663800
b. Direct Material Cost:
Particulars Amount $
Materials purchased      463700
Less: Indirect materials       -33600
Less: Materials inventory       -33600
Direct materials cost      396500
c. Direct Labor Cost:
Particulars Amount $
Total manufacturing costs for the period      1003900
Less: Direct materials cost     -396500
Less: Other factory overhead       -15500
Less: Indirect labor       -81800
Direct labor cost      510100

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