Diggens Inc. makes eveningwear for men and women. The following information was gathered from the...
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Diggens Inc. makes eveningwear for men and women. The following information was gathered from the company records for the year, the first year of company operations. Work-in-Process (WIP) Inventory at the end of the year was $15,750. (Assume actual overhead is included in WIP Inventory).
Direct material purchased on account $555,000
Direct material issued to production 447,000
Indirect manufacturing supplies purchased on account 98,750
Indirect manufacturing supplies used for production 34,850
Direct labor payroll accrued 322,500
Indirect labor payroll accrued 93,000
Prepaid factory insurance expired 3,000
Factory utilities paid 21,450
Depreciation on factory equipment recorded 32,550
Factory rent paid 126,000
Sales (all on account) 1,431,000
The companys gross profit rate for the year was 35 percent.
a. Compute cost of goods sold for the year.
b. What was the total cost of goods manufactured for the year?
c. What is Finished Goods Inventory at December 31?
d. If Operating Income was $125,000, what were total selling and administrative expenses
for the year?
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