Question: Osprey Ltd. manufactures designer purses. During the year, it recorded direct materials used of $684,000. Total manufacturing costs of $1,482,000 were incurred during the year.

Osprey Ltd. manufactures designer purses. During the year, it recorded direct materials used of $684,000. Total manufacturing costs of $1,482,000 were incurred during the year. Osprey uses one indirect cost pool for all overhead costs and allocates overhead at a rate of 60% of direct labour dollars.

REQUIRED
Prepare a Schedule of Cost of Goods Manufactured and Sold for the year. You will need to solve for the following unknowns:
a. Direct materials purchased.
b. Direct labour costs.
c. Manufacturing overhead allocated.
d. Cost of goods manufactured.
e. Cost of goods sold.

January 1 December 31 Direct materials inventories Work-in-process inventories Finished goods inventories $193,000 204,000 225,000 S162,000 107,000 248,000

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Summary of unknowns See Schedule below a Direct materials purchased 653000 b Direct labour 498750 c ... View full answer

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