The following problem is an introduction to production costs:
River Queen Corporation began operations early in the current year, building luxury boats. During the year, the company started and completed 40 boats at a cost of $80,000 per unit. Of these, 30 were sold for $130,000 each and 10 remain in finished goods inventory. In addition, the company had 5 partially completed units in its factory at year-end. Total costs for the year were as follows:
$800,000 = Direct Materials Used
$1,000,000 = Direct Labor
$80,000 = Income Tax Expense
$600,000 = General and Administrative Expenses
$2,000,000 = Manufacturing Overhead
$400,000 = Selling Expenses
Compute the following for the current year:
A. Total manufacturing costs charged to work in process during the period.
B. Cost of finished goods manufactured
C. Cost of Goods Sold
D. Gross Profit on sales
E. Ending Inventories of Work in Process
F. Ending Inventories of Finished Goods