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Lopez Corporation incurred the following costs while manufacturing its product. Materials used in product $122,200 Advertising expense $49,900 Depreciation on plant 69,200 Property taxes on plant 17,600 Property taxes on store 8,590 Delivery expense 28,300 Labor costs of assembly-line workers 113,100 Sales commissions 44,400 Factory supplies used 34,000 Salaries paid to sales clerks 51,300 Work in process inventory was $13,300 at January 1 and $17,200 at December 31. Finished goods inventory was $68,800 at January 1 and $47,900 at December 31. Required: a. Compute cost of goods manufactured. b. Compute cost of goods sold.

          Lopez Corporation incurred the following costs while manufacturing its product. 
Materials used in product                                     $122,200                             Advertising expense                             $49,900 
Depreciation on plant                                             69,200                                 Property taxes on plant                        17,600 
Property taxes on store                                          8,590                                   Delivery expense                                    28,300 
Labor costs of assembly-line workers                 113,100                              Sales commissions                               44,400 
Factory supplies used                                            34,000                                 Salaries paid to sales clerks                51,300 
Work in process inventory was $13,300 at January 1 and $17,200 at December 31. Finished goods inventory was $68,800 at January 1 and $47,900 at December 31.
Required:
a. Compute cost of goods manufactured.
b. Compute cost of goods sold.

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Added by Jessica G.

Principles of Economics

Gregory Mankiw 8th Edition

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Solved by Expert Jonathan Tapiwa

04/27/2022

Step 1

To compute the cost of goods manufactured, we need to add up all the costs incurred during the manufacturing process. These costs include: - Materials used in product: $122,200 - Depreciation on plant: $69,200 - Property taxes on plant: $17,600 - Delivery expense: Show more…

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Lopez Corporation incurred the following costs while manufacturing its product. Materials used in product $122,200 Advertising expense $49,900 Depreciation on plant 69,200 Property taxes on plant 17,600 Property taxes on store 8,590 Delivery expense 28,300 Labor costs of assembly-line workers 113,100 Sales commissions 44,400 Factory supplies used 34,000 Salaries paid to sales clerks 51,300 Work in process inventory was $13,300 at January 1 and $17,200 at December 31. Finished goods inventory was $68,800 at January 1 and $47,900 at December 31. Required: a. Compute cost of goods manufactured. b. Compute cost of goods sold.

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Transcript

00:01 Here we are providing, we are provided with the following data regarding a manufacturing entity.

00:06 And so the direct material is 122 ,200.

00:11 The advertising costs are given as 49 ,900.

00:15 Depreciation plant is 69 ,200.

00:19 Taxes on the property taxes on the plant, 17600.

00:23 Property taxes on the store is 8 ,590.

00:28 Delivery is 28 ,000, $28 ,300.

00:33 Then we have direct labor costs, $118 ,000.

00:38 Sales commission, 44 ,400.

00:41 The factory supplies are $34 ,000.

00:44 And the salaries for the clerks is actually $51 ,300.

00:50 So the other additional information that is given is that working process, a work in progress inventory.

00:57 At the beginning of this financial period is 18 ,300.

01:02 And at the end, which is the 1st of december, 17 ,200, the finished goods inventory at the beginning is 68 ,800.

01:11 And at the close of the period is 37 ,900.

01:17 So the question is, what is the cost of goods manufactured? so that's the first of goods manufactured in this particular period.

01:28 Now, in order to determine this, we simply need to have our opening work in process or work in progress, which is the 13 ,300.

01:44 Obviously, this is, and we need to add to that the manufacturing costs.

01:50 Now these manufacturing costs are going to be given by the addition of direct material...

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