The following information is for Megan Hat Manufacturing Company.

Required:

a. What is the cost of direct material used in production?

b. Prepare a cost of goods manufactured schedule.

c. Prepare a cost of goods sold schedule.

d. Appendix: Prepare journal entries to record the following:
1. The purchase of direct material assuming it was purchased on account 2. The use of direct material in production 3. Direct labor cost 4. Manufacturing overhead cost (Use “various accounts” for the credit side of the entry.)
5. The cost of goods manufactured 6. The sale of finished goods assuming the sale price was $600,000 and the sale was on account.

Transcribed Image Text:

Inventory information: Raw materials inventory Work-in-process inventory Finished goods inventory Other information: Direct materials purchases Direct labor cost Manufacturing overhead January 1, 2005 $9,000 December 31, 2005 $11,000 22,000 18,000 42,000 38,000 $120,000 250,000 140,000