During the year, a company purchased raw materials of $77,323, and incurred direct labor costs of $125,900. Overhead is applied at the rate of 70% of the direct labor cost. These are the inventory balances: Beginning Ending Raw materials inventory$17,432$16,426 Work in process inventory241,440234,422 Finished goods inventory312,840342,384 Compute the cost of materials used in production, the cost of goods manufactured, and the cost of goods sold. Cost of materials used in production$fill in the blank 1 Cost of goods manufactured$fill in the blank 2 Cost of goods sold$fill in the blank 3

a. Cost of materials used in production = $78,329

b. Cost of goods manufactured = $299,377

c. Cost of goods sold = $269,833

Explanation:

a. Compute the cost of materials used in production

This can be computed as follows:

Cost of materials used in production = Beginning Raw materials inventory + Raw materials purchased - Ending Raw materials inventory = $17,432 + $77,323 - $16,426 = $78,329

b. Compute the cost of goods manufactured

This can be computed as follows:

Overhead applied = Direct labor costs * 70% = $125,900 * 70% = $88,130

Cost of goods manufactured = Cost of materials used in production + Direct labor costs + Overhead applied + Beginning work in process inventory - Ending work in process inventory = $78,329 + $125,900 + $88,130 + $241,440 - $234,422 = $299,377

c. Compute the cost of goods sold

This can be computed as follows:

Cost of goods sold = Beginning finished goods inventory + Cost of goods manufactured - Ending finished goods inventory = $312,840 + $299,377 - $342,384 = $269,833