Question

[The following information applies to the questions displayed below.] Alhambra Aluminum Company, a manufacturer of recyclable soda cans, had the following inventory balances at the beginning and end of 20x1 Inventory December 31, 20x1 $ 70,000 January 1, 20x1 Classification Raw material Work in process 60,000 120,000 115,000 Finished goods 150,000 65,000 During 20x1, the company purchased $240,000 of raw material and spent $400,000 for direct labor. Manufacturing overhead costs were as follows $ 9,000 Indirect material Indirect labor Depreciation on plant and 25,000 100,000 25,000 equipment Utilities Other 30,000 Sales revenue was $1,106,000 for the year. Selling and administrative expenses for the year amounted to $110,000. The firm's tax rate is 40 percent.

Answer 1

Calculation of Cost of Goods Manufactured : -

Particulars	Amount ($)	Amount ($)
Direct Material :
Beginning Raw Material Inventory	60,000
Add : Purchase of raw material	240,000
Less : Closing Raw Material Inventory	(70,000)
Direct Material Used (A)		230,000
Direct Labor (B)		400,000
Manufacturing Overhead :
Indirect Material	9,000
Indirect Labor	25,000
Depreciation on Plant & Equipment	100,000
Utilities	25,000
Others	30,000
Total Manufacturing Overhead (C)		189,000
Total Manufacturing Cost (A + B + C) = D		819,000
Beginning Work In Progress	120,000
Less : Ending Work In Progress	115,000
Work In Progress (E)		5,000
Cost of Goods Manufactured (D + E)		824,000