West Shoe Company makes loafers. During the most recent year, West incurred total manufacturing costs of $25.6 M. Of this amount, $ 2.1 M was direct materials used and $ 18.8 M was direct labor. Beginning balances for the year were Direct materials inventory, $ 0.6 M; Work in process inventory, $ 1.5 M; and Finished goods inventory, $ 0.7 M. At the end of the year, inventory accounts showed these amounts:

Requirements

1. Compute West Shoe Company's cost of goods manufactured for the year.

2. Compute West's cost of goods sold for the year.

3. Compute the cost of materials purchased during the year.

Requirement 1. Compute the cost of goods manufactured for the year.

Work in process inventory

Beginning inventory

Plus: Direct materials used

Plus: Direct labor

Plus: Manufacturing overhead

Total manufacturing costs incurred during the year

Total manufacturing costs to account for

Less: Ending inventory

Cost of goods manufactured

Requirement 2. Compute the cost of goods sold for the year.

Finished goods inventory

Beginning inventory

Plus: Cost of goods manufactured

Cost of goods available for sale

Less: Ending inventory

Cost of goods sold

Requirement 3. Complete the table to compute the cost of materials purchased during the year.

Materials purchased

Direct materials used

Less: Beginning inventory

Plus: Ending inventory

Purchases

			Direct		Manufacturing
	Materials		Labor		Overhead
Direct materials inventory	$0.70	M	$ 0		$ 0
Work in process inventory	0.60	M	0.40	M	0.20	M
Finished goods inventory	0.80	M	0.65	M	0.05	M