The following selected information was extracted from the 20x3 accounting records of Farrina Products: Raw materials used$284,000Direct labor178,000Indirect labor35,000Selling and administrative salaries250,000Building depreciation*330,000Other selling and administrative expenses80,000Other factory costs620,000*Seventy percent of the company's building was devoted to production activities; the remaining 30% was used for selling and administrative functions.Farrina's beginning and ending work-in-process inventories amounted to $306,000 and $245,000, respectively. The company's beginning and ending finished-goods inventories were $450,000 and $440,000, respectively.Required: A. Calculate Farrina's manufacturing overhead for the year.B. Calculate Farrina's cost of goods manufactured.C.
Compute Farrina's cost of goods sold.
What will be an ideal response?
The answers include:
A. Manufacturing overhead = $35,000 + ($330,000 X. .7) + $620,000 = $886,000
B. COGM = $306,000 + $1,348,000 ($284,000 + $178,000 + $886,000) = $1,654,000 - 245,000 = $1,409,000
C. COGS = $450,000 + $1,409,000 = $1,859,000 - $440,000 = $1,419,000
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