Reference no: EM13533126

Flow of costs through a manufacturer's inventory accounts

Root Shoe Company makes loafers. During the most recent year, Root incurred total manufacturing costs of $26,400,000. Of this amount, $2,100,000 was direct materials used and $19,800,000 was direct labor. Beginning balances for the year were Direct materials inventory, $600,000; Work in process inventory, $800,000; and Finished goods inventory, $700,000. At the end of the year, inventory accounts showed these amounts:

	Materials	Direct Labor	Manufacturing Overhead
Direct materials inventory	$ 900,000	$ 0	$ 0
Work in process inventory	400,000	600,000	400,000
Finished goods inventory	800,000	150,000	40,000

Requirements

1. Compute Root Shoe Company's cost of goods manufactured for the year.

2. Compute Root's cost of goods sold for the year.

3. Compute the cost of materials purchased during the year.