Wrangler Company makes casual jeans During the most recent y

Wrangler Company makes casual jeans. During the most recent yea: Wrangler incutred direcr labor cost of S60 M and manufacruring ove- head of S75M. The company purchased direct materials of $25.71. Beginning balances for the year were Direct Materials Inventory, S3.4i work in Process Inventory, $3.8M; and Finished Goods Inventory $7.4M. At year-end, inventory accounts showed these amounts: Direct Manufacturing Direct Materials InventoryS .9M -0S Work in Process Inventory.. 1.5M Finished Goods Inventory Materials Lab Overhead S-0- 2.SM 4.0M 24M 3.2M Requirements Refer to Exhibit 18-11, p. 914. Compute 1. Wrangler Company\'s cost of direct materials used for the yeat. 2. Wrangler\'s cost of goods manufactured for the year. 3. The company\'s cost of goods sold for the year.

Solution

1 Cost of direct materials used for the year A Purchase of Direct Materials $25.70 M B Beginning balance of Direct Material Inventory $3.40 M C=A+B Total Direct Materials available $29.10 M D Year end balance of Direct Materials Inventory $0.90 M E=C-D Direct Materials used for the year $28.20 M 2 Cost of goods manufactured A Beginning balance of Work in Process Inventory $3.80 M B Cost of Direct Materials used for the year $28.20 M C Direct labor cost during the year $60 M D Manufacturing overhead cost during the year $75 M E Year End Work in Process Inventory $6 M (1.5+2.0+2.5) F=A+B+C+D-E Cost of manufactured goods for the year $161.00 M 3 Cost of goods sold A Beginning balance finished goods inventory $7.40 M B Cost of goods manufactured $161.00 M C Year end finished goods inventory $9.60 M (2.4+3.2+4) D=A+B-C Cost of goods sold $158.80 M