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    Operations of the Good Time Clock Company for 2004:

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    The partial information that follows pertains to the operations of Good Time Clock Company for 2004:

    Raw materials inventory, January 1, 2004 $ 5,000
    Raw materials inventory, December 31, 2004 $ 2,000
    Direct labor charged to production during 2004 $18,000
    Factory overhead costs incurred during 2004 $15,000
    Cost of goods manufactured for the year 2004 $45,000
    Work-in-process inventory, January 1, 2004 $ 5,000
    Work-in-process inventory, December 31, 2004 $15,000
    Finished goods inventory, January 1, 2004 $15,000
    Cost of goods sold $40,000

    Determine (a) the cost of materials purchased (b) the cost of raw materials used during the year, and (c) the balance in the finished goods inventory account on December 31, 2004.

    (Would I list the good sold in one category and the materials WIP, and then the cost of goods? I am not sure how to work this out? Please show in detail. thank you!

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    Solution Summary

    This solution shows step-by-step calculations in an Excel file to determine the cost of materials purchased, cost of raw materials used, and the balance in the finished good inventory account.