Road King manufactures fiberglass travel trailers. The manufacturing costs incurred during its first year of operations are as follows.

During the year, 150 completed trailers were manufactured, of which 120 were sold. (Assume that the ending Finished Goods Inventory and the Cost of Goods Sold amounts are determined using the average per-unit cost of manufacturing a completed trailer.)

Instructions
a. Compute each of the following and show all computations:
1. The average per-unit cost of manufacturing a completed trailer during the current year.
2. The year-end balances of the inventories of materials, work in process, and finished goods.
3. The cost of goods sold during the year.
b. During the year, the costs of direct materials purchased, direct labor assigned to production, and actual manufacturing overhead total $1,305,000. Is this the amount of manufacturing costs deducted from revenue in the current year? Explain fully.

Transcribed Image Text:

Direct materials purchased .. ... Direct materials used ... Direct labor... Manufacturing overhead .. Cost of finished goods manufactured (150 trailers).. $735,000 665,000 190,000 380,000 975,000