Beginning of Year

End of Year

End of Year

Raw materials inventory. $.......$

$$23,000$

$$25,000$

Insurance on plant. $......................$

$$11,500$

Work in process inventory. $......$

$$35,000$

$$31,000$

Depreciation$-$plant building and equipment. $...$

$$13,400$

Finished goods inventory. $.......$

$$20,000$

$$22,000$

Repairs and maintenance$-$plant. $............$

$$3,700$

Purchases of direct materials. $...$

$$74,000$

Marketing expenses. $.....................$

$$77,000$

Direct labor. $..................$

$$86,000$

General and administrative expenses. $.......$

$$28,500$

Indirect labor. $.................$

$$42,000$

Compute the Cost of Goods Manufactured and Cost of Goods Sold for West Nautical Company for the most recent year using the amounts described next. Assume that Raw Materials Inventory contains only direct materials.

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Part $1$

Start the calculation for cost of goods manufactured by calculating the direct materials used.

West Nautical Company

Calculation of Direct Materials Used

For Current Year

Beginning raw materials inventory

$$23,000$

Plus:

Purchases of direct materials

$74,000$

Materials available for use

$97,000$

Less:

Ending raw materials inventory

$25,000$

Direct materials used

$$72,000$

Part $2$

Calculate the cost of goods manufactured.

West Nautical Company

Calculation of Cost of Goods Manufactured

For Current Year

Beginning work in process inventory

$$35,000$

Plus:

Manufacturing costs incurred

Direct materials used

$$72,000$

Direct labor

$86,000$

Manufacturing overhead

Total manufacturing costs to account for

Less:

Ending work in process inventory

$31,000$

Cost of goods manufactured