Anonymous posted the following answer about a year ago. I need help understanding letter "b" and "d". Specifically, I need help understanding why 381,000 = 160% and why then 381,000 is multiplied by 100/160. I need to understand the reasoning so I can follow it. Additionally, in letter d, why was Cost of good manufactured divided by Production + beginning FG - Ending FG. I don't understand why CGM was divided. Again, I just need to understand the reasons why for both so when I see a problem like this, I will know what to do in the future.

ANSWER BY ANONYMOUS IS BELOW:

Analyzing Activity in Inventory Accounts.

Selected data concerning operations of Cascade Manufacturing Company for the past fiscal year follow:

Raw materials used	$300,000
Total manufacturing costs charged to production during the year (includes raw materials, direct labor, and manufacturing overhead applied at a rate of 60 percent of direct labor costs)	681,000
Cost of goods available for sale	826,000
Selling and general expenses	30,000

	Inventories
	Beginning	Ending
Raw materials	$70,000	$80,000
Work-in-process	85,000	30,000
Finished goods	90,000	110,000

Determine each of the following: (a) Cost of raw materials purchased

(b) Direct labor costs charged to production

(c) Cost of goods manufactured

(d) Cost of goods sold

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  (a)

  Direct Material at the beginning + Purchases = Materials used in production + Direct material at end

  $70,000 + Purchase = $300,000 + $80,000

  Therefore Purchase = $380,000 - 70,000 = $310,000

  (b)

  Total manufacturing Cost = $681,000

  Raw material used = $300,000

  therefore rest ($381,000 ) inclides both direct labor and manufacturing over heads

  $381,000 = 160%

  threfore Direct labor cost = $381,000 * 100/160 = $238,125

  Direct labor cost = $381,000 * 100/160 = $238,125

  (c)

  Cost of goods manufactured = Total manufacturing costs + Beginning work in process - ending work in process

  Cost of goods manufactured = $681,000 + 85,000 - 30,000 = $736,000

  (d)

  Cost of goods sold = Cost of goods manufactured / Production + Beginning FG - Ending FG

  Cost of goods sold = $736,000 + 90,000 - 110,000 = $716,000