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DanielleCPA
DanielleCPA , Certified Public Accountant (CPA)
Category: Finance
Satisfied Customers: 781
Experience:  CPA experienced in tax and financial planning
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The following information is available for the first month

Customer Question

The following information is available for the first month of operations of Url Inc., a manufacturer of art and craft items:
Sales $1,200,00
Gross profit 320,000
Indirect labor 110,000
Indirect materials 45,000
Other factory overhead 20,000
Materials purchased 610,000
Total manufacturing costs for the period 1,325,000
Materials inventory, end of period45,000
Using the above information, determine the following missing amounts:
b. Direct materials cost $
c. Direct labor cost $
Submitted: 5 years ago.
Category: Finance
Expert:  DanielleCPA replied 5 years ago.

DMC :

Hi and welcome to Just Answer! I'm happy to help answer your Finance questions. Feel free to interject at any time if you need clarification. Give me a few minutes and I'll get you the answer to this.

Expert:  DanielleCPA replied 5 years ago.

You have # XXXXX and #c - is there an #a? Just want to make sure I'm answering all parts for you.

Expert:  DanielleCPA replied 5 years ago.

Here the answers to B & C. Let me know if you need anything else:

 

Direct Materials Cost = Materials purchased less materials inventory

610,000 - 45,000 = 565,000

 

Direct Labor Cost: Total Manufacturing Costs Less Direct materials Cost less Factory Overhead

Factory Overhead for this problem is Indirect labor + Indirect Materials + Other Factory Overhead

1,325,000 - 880,000 - 110,000 - 45,000 - 20,000 = 270,000

DanielleCPA and other Finance Specialists are ready to help you
Customer: replied 5 years ago.

There is something wrong with letter B...because thats not a choice with that value

 

A.700,000

B.655,000

C.520,000

D.90,000

Expert:  DanielleCPA replied 5 years ago.

The answer is C, 520,000. I failed to take into account indirect materials.

 

So the answer is arrived at Materials Purchased less direct materials less indirect materials.

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