Cost Management: A Strategic Emphasis 5th Edition by David Stout, Edward Blocher, Gary Cokins

Exercise 60

Cost of Goods Manufactured, Calculating Unknowns The following information was taken from the accounting records of Tomek Manufacturing Company. Unfortunately, some of the data were destroyed by a computer malfunction.

	Case A	Case B
Sales	$150,000	$ ?
Finished goods inventory, Jan. 1, 2010	35,000	28,000
Finished goods inventory, Dec. 31, 2010	40,000	?
Cost of goods sold	?	61,000
Gross margin	25,000	23,000
Selling and administrative expenses	?	1,000
Operating income	10,000	22,000
Work in process, Jan. 1, 2010	?	14,000
Direct material used	18,000	8,000
Direct labor	35,000	9,000
Factory overhead	50,000	?
Total manufacturing costs	?	35,000
Work in process, Dec. 31, 2010	22,000	?
Cost of goods manufactured	?	45,000

Required Calculate the unknowns indicated by question marks.

Step 1 of 4

Direct costs are those costs which can be clearly related to certain good or activity. Indirect costs are those costs which cannot be clearly related to certain good or activity. Cost is expense of resource which happens when the resource is used.