Total sales were $5,400,000, on which the company earned a 40% gross profit. Durango uses a predetermined manufacturing overhead rate of 120% of direct labor costs. Manufacturing overhead applied was $1,080,000. Exclusive of indirect material used, total manufacturing overhead incurred was $729,000 it was over-applied by $67,500.

Required

Compute the following items. (Set up T accounts for Materials Inventory, Work in Process Inventory, Finished Goods Inventory, and Manufacturing Overhead; fill in the known amounts; and then use the normal relationships among the various accounts to compute the unknown amounts.)

1. Cost of goods sold.

2. Cost of goods manufactured.

3. Direct labor incurred

4. Direct material used.

5. Indirect material used.

6. Total materials purchased.

Job Cost Journal Entries and T Accounts Following are certain operating data for Durango Manufacturing Company for January 2016 Materials Inventory Work in Process Inventory Finished Goods Inventory Beginning inventory $171,000 $72,000 $225,000 Ending inventory 99,000 121,500 144,000 Materials Inventory 171,000 Beg. bal. 0 (d) (f) 0. 0 (e) End. bal. Work in Process Inventory 72,000 Beg. bal. 0 (b) (c) (d) End. bal. Manufacturing Overhead Beg. bal. (e) O End. bal. Finished Goods Inventory Beg. bal. 225,000 o(a) (b) End. bal. Job Cost Journal Entries and T Accounts Following are certain operating data for Durango Manufacturing Company for January 2016 Materials Inventory Work in Process Inventory Finished Goods Inventory Beginning inventory $171,000 $72,000 $225,000 Ending inventory 99,000 121,500 144,000 Materials Inventory 171,000 Beg. bal. 0 (d) (f) 0. 0 (e) End. bal. Work in Process Inventory 72,000 Beg. bal. 0 (b) (c) (d) End. bal. Manufacturing Overhead Beg. bal. (e) O End. bal. Finished Goods Inventory Beg. bal. 225,000 o(a) (b) End. bal