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In March, AEK Company purchased materials costing $14,000 and incurred direct labour cost of $20,000. Overhead...

In March, AEK Company purchased materials costing $14,000 and incurred direct labour cost of $20,000. Overhead totaled $36,000 for the month. Information on inventories was as follows:

                                    March 1           March 31
Materials                     $8,600             $2,300
Work in process          $1,700             $9,000
Finished Goods           $7,000             $6,500

Required:
(a) What was the cost of direct materials for March?
(b) What was the total manufacturing cost in March?
(c) What was the cost of goods manufactured for March?

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Answer #1

(a)

Direct material cost = Beginning material + Purchases - Ending material

= $8,600 + $14,000 - $2,300

= $20,300

(b)

Total manufacturing cost = Direct material cost + Direct labor + Overhead

= $20,300 + $20,000 + $36,000

= $76,300

(c)

Cost of goods manufactured = Total manufacturing cost + Beginning work in process - Ending work in process

= $76,300 + $1,700 - $9,000

= $69,000

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