Start by determining the ending inventory of raw materials by calculating the direct materials used. Unique Displays More Info Calculation of Direct Materials Used For Current Year Beginning raw materials inventory $ 75,000 Plus: Purchases of direct materials 533,000 Data Table Direct materials available for use 608,000 Less: Ending raw materials inventory 112,000 $ Direct materials used 496,000 Before the disaster recovery specialists clean the buildings, Louise Ditchey, the company controller, is anxious to salvage whatever records she can to support an insurance claim for the destroyed inventory. She is standing in what is left of the Accounting Department wtih Trent Parker, the cost accountant. "I didn't know mud could smell so bad," Trent says. "What should I be looking for?" "Don't worry about beginning inventory numbers," responds Louise. "We'll get them from last year's annual report. We need first-quarter cost data." "I was working on the first-quarter results just before the storm hit," Trent says. "Look, my report's still in my desk drawer. But all I can make out that for the first quarter, material purchases were $533,000 and that direct labor, manufacturing overhead (other than indirect materials), and total manufacturing costs to account for were $551,000; $218,000; and $1,491,000, respectively. Wait, and cost of goods available for sale was $1,615,000." "Great," says Louise. "I remember that sales for the period were approximately $1.8 million. Given our gross profit of 30%, that's all you should need." Trent is not sure about that, but decides to see what he can do with this information. Raw materials, $75,000 Work in process, $226,000 Finished goods, $213,000 He remembers several schedules he learned in college that may help him get started. Next, determine the ending inventory of work in process by calculating the cost of goods manufactured. Unique Displays Calculation of Cost of Goods Manufactured For Current Year Print Done Plus: Direct labor 551,000 Print Done Manufacturing overhead 218,000 Total manufacturing costs to account for 1,491,000 Less: Ending work in process inventory 89,000 1,402,000 Cost of goods manufactured