Required information The following information applies to th

Required information [The following information applies to the questions displayed below.] The following data refer to San Fernando Fashions Company for the year 20x2: Sales revenue Work-in-process inventory, December 31 Work-in-process inventory, January 1 Selling and administrative expenses Income tax expense Purchases of raw material Raw-material inventory, December 31 Raw-material inventory, January 1 Direct labor Utilities: plant Depreciation: plant and equipment Finished-goods inventory, December 31 Finished-goods inventory, January 1 Indirect material Indirect labor Other manufacturing overhead $1,050,000 30,000 36,000 150,000 80,000 160,000 25,000 30,000 180,000 40,000 40,000 50,000 15,000 10,000 12,000 40,000

Solution

Opening Stock of Finished Goods Inventory = 15,000

Cost of goods produced during the year (Note 1) = 413,000

Cost of goods available for sale = 428,000

Less: Closing stock of Finished goods = 50,000

Cost of goods sold =378,000

Note 1: Calculation of Cost of goods produced during the year

Opening Work in progress inventory + Raw Materials Consumed (NOTE 2) + Direct Labour + Indirect Material + Indirect Labour + Other Manufacturing Overheads - Closing Work in progress inventory

=36,000 + 165,000 + 180,000 + 10,000 + 12,000 + 40,000 - 30,000

= 413,000

Note 2: Calculation of Raw Materials Consumed

= Opening Raw Material + Purchases of Raw Material - Closing Raw Materials

= 30,000 + 160,000 - 25,000

= 165,000