Mustafa manufacturing company began operations on january 1. During the year, it started and completed 3, 000 units of product. The financial statements are prepared in accordance with GAAP. The company incurred the following costs: Raw materials purchased and used—$6,200.
Wages of production workers—$7,400.
Salaries of administrative and sales personnel—$3,000.
Depreciation on manufacturing equipment—$4,400.
Depreciation on administrative equipment—$2,200.

Required
a. Determine the total product cost for the year.
b. Determine the total cost of the ending inventory.
c. Determine the total of cost of goods sold.

Answer and Explanation:

The computation is shown below;

a. The total product cost is  

Raw materials purchased and used  $6,200

Wages of production workers $7,400

 Depreciation on manufacturing equipment $4,400

Total Product Cost  $18,000

b. The total cost of the Inventory is  

Units Completed = 3,000 units  

Units Sold = 2,400 units  

SO, the Units in ending inventory units is 600 units

Now the  Total cost of the Inventory is

= $18,000 × [600 ÷ 3,000 ]

= $3600

c. The total cost of goods sold is  

= $18,000 × [2,400 ÷ 3,000 ]

= $14,400

a manufacturer of printed circuit boards uses exponential smoothing with trend to forecast monthly demand of its product. at the end of december, the company wishes to forecast sales for january. the estimate of trend through november has been 200 additional boards sold per month. average sales have been around 1000 units per month. the demand for december was 1100 units. the company uses α = 0.20 and β = 0.10. make a forecast including trend for the month of january.

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