Cost flow relationships the following information is available for the first month of operations of kellman inc., a manufacturer of art and craft items: sales $3,600,000 gross profit 650,000 indirect labor 216,000 indirect materials 120,000 other factory overhead 45,000 materials purchased 1,224,000 total manufacturing costs for the period 2,640,000 materials inventory, end of period 98,800 using this information, determine the following missing amounts: a. cost of goods sold $. direct materials cost $. direct labor cost $

(i) $2,950,000

(ii) $1,005,200

(iii) $1,253,800

Explanation:

Cost of goods sold =  sales - gross profit

                                = $3,600,000 - $650,000

                                =  $2,950,000

Direct material cost = Material purchased - Indirect material - ending material inventory

                                 = 1,224,000 - 120,000 - 98,800

                                 = $1,005,200

Direct labor cost:

= Total manufacturing costs for the period - Indirect labor - Indirect materials - Other factory overhead - Direct material cost

= 2,640,000 - 216,000 - 120,000 - 45,000 - $1,005,200

= $1,253,800

the answer is "b.the increased supply will create a surplus. "

the essential thought behind price controls is straightforward - utilize the power of law to modify the equilibrium of a market. for instance, the legislature may choose that the steel business needs to survive, and in this way pass a law to set a value floor on steel. this implies all steel sold must offer at or over the floor value, which must be set over the equilibrium cost for it to have any impact. the switch could likewise happen - the administration can choose that steel is excessively costly and set a value roof underneath its equilibrium value, with the goal that all steel must be sold at or beneath that ceiling.