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Lee Corporation produced 120,000 boomerangs last year. These boomerangs sell for $100 each. Lee had 11,350 boomerangs in finished goods inventory at the beginning of

Lee Corporation produced 120,000 boomerangs last year. These boomerangs sell for $100 each. Lee had 11,350 boomerangs in finished goods inventory at the beginning of the year. At the end of the year, there were 7,600 boomerangs in finished goods inventory. Lee uses FIFO method of accounting and the accounting records from last year show the following information:

a.

Purchases of Raw Materials

$900,000

b.

Rent on the factory building

250,000

c.

Utilities (50% factory, 50% sales office)

60,000

d.

Insurance on the factory

10,000

e.

Depreciation, factory equipment

70,000

f.

General Administration

175,000

g.

Raw Materials used as supplies

35,000

h.

Plant receptionist and Plant landscaping

100,000

i.

Salaries

Direct labor

2,500,000

Factory Supervisors

500,000

Plant Manager

90,000

Plant Controller

40,000

Receiving personnel

60,000

Quality Inspectors

150,000

Salespeople

300,000

Machine Maintenance salary

100,000

RM Inventory manager

40,000

Total Salaries

3,780,000

Raw Materials Inventory, January 1

310,000

Raw Materials Inventory, December 31

100,000

Work In Process Inventory, January 1

450,000

Work In Process Inventory, Dec. 31

600,000

Finished Goods Inventory, January 1

454,000

Required:

  1. Prepare a Cost of Goods Manufactured Statement.

Beginning RM Inventory

+ Raw Material Purchases

= RM Available for Use

- RM used as supplies

- Ending RM Inventory

= DM Used in Production

+ Direct Labor

+ Manufacturing Overhead

= Total Manufacturing Cost

+ Beginning WIP

- Ending WIP

= COGM

  1. What was the cost of producing one boomerang last year?

  1. Based on the COGM Statement, what is the value of ending FG inventory?

  1. What was COGS?

= COGM

+ Beginning FG

- Ending FG

= COGS

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