Question - Renka Shoe Company makes loafers. During the most recent year, Renka incurred total manufacturing costs of $25,400,000. Of this amount, $2,500,000 was direct materials used and $18,800,000 was direct labor. Beginning balances for the year were Raw Materials Inventory, $600,000; Work-in-Process Inventory, $1,200,000; and Finished Goods Inventory, $1,300,000. At the end of the year, balances were Raw Materials Inventory, $700,000; Work-in-Process Inventory, $1,600,000; and Finished Goods Inventory, $1,230,000.
Requirements - Analyze the inventory accounts to determine:
1. Cost of raw materials purchased during the year.
2. Cost of goods manufactured for the year.
3. Cost of goods sold for the year.