Direct Beginning Materials Ending materials = + – inventory purchased inventory used Direct materials = $16,000 + $38,400 $12,000 – used Direct materials = $42,400 used c. Sales revenue Cost of sold = Gross margin – revenue $87,040 = $52,480 – Rearranging, Sales revenue = $139,520 (= $52,480 + $87,040) Gross margin % = $52,480 ÷ $139,520 = 37.6% (40 Min.) Find the Unknown Information. a. Cost of Finished goods Cost of goods Finished = + – goods sold beginning inventory manufactured ending inventory = $22,320 + $598,400 $25,520 – Cost of = $595,200 goods sold b. Direct Direct Manufacturing manufacturing = materials + + labor overhead costs used Direct $612,320 = materials + $270,400 + $225,000 used Direct = $116,920 (= $612,320 $270,400 $225,000) – – materials used c. Direct Beginning Materials Ending materials = + – inventory purchased inventory used Materials $116,920 = $2,520 + $2,088 – purchased
Direct materials used = Beginning inventory + Materials purchased – Ending inventory Direct materials used = $16,000 + $38,400 – $12,000 Direct materials used = $42,400 c. Sales revenue – Cost of sold = Gross margin revenue – $87,040 = $52,480 Rearranging, Sales revenue = $139,520 (= $52,480 + $87,040) Gross margin % = $52,480 ÷ $139,520 = 37.6% (40 Min.) Find the Unknown Information. a. Cost of goods sold = Finished goods beginning inventory + Cost of goods manufactured – Finished ending inventory = $22,320 + $598,400 – $25,520 Cost of goods sold = $595,200 b. manufacturing costs = Direct materials used + Direct labor + Manufacturing overhead $612,320 = Direct materials used + $270,400 + $225,000 Direct materials used = $116,920 (= $612,320 – $270,400 – $225,000) c. Direct materials used = Beginning inventory + Materials purchased – Ending inventory $116,920 = $2,520 + Materials purchased – $2,088