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September 16, 2020
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September 16, 2020


Pearce Manufacturing Inc. incurred the following costs in February:

Direct labor


Advertising costs


Indirect labor


Factory rent


Administrative salaries


Factory depreciation


Raw materials purchased


Administrative rent


Indirect materials used


Administrative depreciation


In addition, the following information is also available:



Raw materials






Finished goods



Number of units produced

10,000 units

Number of units sold

(sales price of $25 per unit)

9,000 units

  • 1.) Calculate total period costs.
  • 2.) Calculate raw materials used.
  • 3.) Calculate cost of goods manufactured.
  • 4.) Calculate the product cost per unit.
  • 5.) Calculate cost of goods sold.
  • 6.) Calculate net operating income. (Ignore taxes)

The following information is available for the Brown Company for the month ended July 31:

Direct materials purchased


Direct labor (2,500 hrs@$12)


Indirect labor


Indirect materials


Office supplies expense


Factory equipment depreciation


Office equipment depreciation


Administrative expenses


Office utilities


Factory utilities


Marketing expense


Sales revenue


Sales commissions expense




Direct materials inventory



Work in process inventory



Finished goods inventory



  • 7.) Determine the direct materials used in July.
  • 8.) Determine cost of goods manufactured in July.
  • 9.) Determine cost of goods sold for July
  • 10.) Prepare an income statement for July. (Ignore taxes)

Complete responses should meet or exceed the required word count if applicable. The minimum word count will need to exceed 150 words for each question unless otherwise stated. You must show your work if the question required a numerical answer.


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