The Following Information Is Available for the First Month of Operations

question 88

Essay

The following information is available for the first month of operations of Deer Inc., a manufacturer of sports apparel:
$\begin{array}{ll}\$ 1,500,000 & \text { Sales } \\410,000 & \text { Gross profit } \\125,000 & \text { Indirect labor } \\30,000 & \text { Indirect materials } \\415,000 & \text { Other factory overhead } \\700,000 & \text { Materials purchased } \\1,600,000 & \text { Total manufacturing costs for the period } \\35,000 & \text { Materials inventory, end of period }\end{array}$ Using the given information, determine the following:
a. Cost of goods sold
b. Direct materials cost
c. Direct labor cost

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Definitions:

Cost of Equity

The return a firm theoretically pays to its equity investors, i.e., shareholders, to compensate for the risk they undertake by investing their capital.

Cost of Debt

The effective rate that a company pays on its current debt as part of its capital structure.

Debt-Equity Ratio

The financial ratio reflects how shareholders' equity and debt equally contribute to asset financing.

Yield-To-Maturity

An estimate of the total return expected on a bond if the bond is held until the date it matures.