Benedetto Fallica is a manufacturer of fashionable clothing.  He hired Nadim Youkim as his CFO 5 years ago. Nadim has been happily working at the company for the past 7 years.  Nadim has recently been asked by Benedetto to assess the following manufacturing records from the manufacture of the new clothing line with sales of $2,550,000

Beginning Direct Materials Inventory $45,000
Direct Materials Purchased $756,000
Beginning Work in Progress Inventory $58,500
Beginning Finished Goods Inventory $175,600
Wages paid for direct labourers $456,000
Wages paid to factory supervisors $234,000
P e iden     Sala $450,000
Head office salary costs $350,000
Wages paid for Indirect Labour $23,450
Advertising and marketing expenses $356,000
Electricity used in plant $130,000
Overhead supplies used in plant $23,500
Marketing Manager wages $125,000
Fuel purchased for delivery trucks $35,600
Oil for factory heating $87,000
Depreciation on factory equipment $86,000
Property Tax for the factory $32,000
Rent paid for head office $75,000
Rent paid for factory equipment $34,000
Ending Direct Materials Inventory $24,500
Ending Work in Progress Inventory $102,000
Ending Finished Goods Inventory $164,300



  1. Calculate the Cost of Goods Manufactured for the year
  2. Calculate the Cost of Goods Sold
  3. Calculate Operating Income
  4. Compute the prime costs and the conversion costs

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