Consider the following information from Marchant Manufacturing Co. for September. Determine the net income. Direct materials used in production $95,000 Direct labor 67,000 Interest expense 4,000 Raw materials inventory, Sept. 1 24,000 Raw materials inventory, Sept. 30 15,000 Work in process inventory, Sept. 1 6,000 Work in process inventory, Sept. 30 26,000 Finished goods inventory, Sept. 1 101,000 Purchases of raw materials 102,000 Factory supervisors 33,000 Administrative expense 41,000 Factory maintenance 35,000 Selling expense 56,000 Sales 400,000 Depreciation machinery 27,000 Utilities for the factory 30,000 Gross Margin 150,000

Consider the following information from Marchant Manufacturing Co. for September. Determine the net income. Direct materials used in production $95,000 Direct labor 67,000 Interest expense 4,000 Raw materials inventory, Sept. 1 24,000 Raw materials inventory, Sept. 30 15,000 Work in process inventory, Sept. 1 6,000 Work in process inventory, Sept. 30 26,000 Finished goods inventory, Sept. 1 101,000 Purchases of raw materials 102,000 Factory supervisors 33,000 Administrative expense 41,000 Factory maintenance 35,000 Selling expense 56,000 Sales 400,000 Depreciation machinery 27,000 Utilities for the factory 30,000 Gross Margin 150,000

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter2: Basic Cost Management Concepts

Section: Chapter Questions

Problem 22E: Ellerson Company provided the following information for the last calendar year: During the year,...

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During the year, a company purchased raw materials of $77,321, and incurred direct labor costs of $125,900. Overhead is applied at the rate of 75% of the direct labor cost. These are the inventory balances: Compute the cost of materials used in production, the cost of goods manufactured, and the cost of goods sold.
During the year, a company purchased raw materials of $77,321 and incurred direct labor costs of $125,900. Overhead Is applied at the rate of 75% of the direct labor cost. These are the inventory balances: Compute the cost of materials used in production, the cost of goods manufactured, and the cost of goods sold.
Ellerson Company provided the following information for the last calendar year: During the year, direct materials purchases amounted to 278,000, direct labor cost was 189,000, and overhead cost was 523,000. During the year, 100,000 units were completed. Required: 1. Calculate the total cost of direct materials used in production. 2. Calculate the cost of goods manufactured. Calculate the unit manufacturing cost. 3. Of the unit manufacturing cost calculated in Requirement 2, 2.70 is direct materials and 5.30 is overhead. What is the prime cost per unit? Conversion cost per unit?
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