(Product and period cost, CGM and CGS) At the beginning of October 1998, Cris- tin Corporation had...
Question:
(Product and period cost, CGM and CGS) At the beginning of October 1998, Cris- tin Corporation had the following account balances:
During October, the following transactions took place. 1. Raw materials were purchased on account, $75,000. 2. Direct materials ($21,200) and indirect materials ($2,500) were issued to production. 3. Factory payroll consisted of $50,000 for direct labor employees and $7,000 for indirect labor employees. 4. Office salaries totaled $21,100 for the month. 5. Utilities of $8,700 were accrued; 70 percent of the utilities is for the factory area. 6. Depreciation of $9,000 was recorded on plant assets; 80 percent of the de¬ preciation is related to factory machinery and equipment. 7. Rent of $12,000 was paid on the building. The factory occupies 60 percent of the building. 8. At the end of October, the Work in Process Inventory balance was $8,300. 9. At the end of October, the balance in Finished Goods Inventory was $8,900.
a. Determine the total amount of product cost and period cost incurred during October 1998.
b. Compute the cost of goods manufactured for October 1998.
c. Compute the cost of goods sold for October 1998.
d. What level of October sales would have generated net income of $22,400?
LO1
Step by Step Answer:
Cost Accounting Traditions And Innovations
ISBN: 9780538880473
3rd Edition
Authors: Jesse T. Barfield, Cecily A. Raiborn, Michael R. Kinney