Problem 1

COST OF DIRECT MATERIALS, COST OF GOODS MANUFACTURED, COST OF GOODS SOLD (LO 3)

Bisby Company manufactures fishing rods. At the beginning of July, the following information was supplied by its accountant:

Raw materials inventory $40,000

Work-in-process inventory 21,000

Finished goods inventory 23,200

During July, the direct labour cost was $43,500, raw materials purchases were $64,000 and the total overhead cost was $108,750. The inventories at the end of July were:

Raw materials inventory $19,800

Work-in-process inventory 32,500

Finished goods inventory 22,100

Required:

1. What is the cost of the direct materials used in production during July?
2. What is the cost of goods manufactured for July?
3. What is the cost of goods sold for July?