Question

Universal Chemical Company uses oil to produce two types of plastic products, P1 and P2. Universal budgeted 27,300 barrels of oil for purchase in April for $64 per barrel. Direct labor budgeted in the chemical process was $209,700 for April. Factory overhead was budgeted $314,500 during April. The inventories on April 1 were estimated to be:

Oil	$14,700
P1	9,900
P2	8,400
Work in process	12,200

The desired inventories on April 30 were:

Oil	$16,100
P1	9,000
P2	8,000
Work in process	12,600

Use the preceding information to prepare a cost of goods sold budget for April 2017.

Universal Chemical Company

Cost of Goods Sold Budget

For the Month Ending April 30, 2017

(Hint:16 Entries are needed in this answer, 14 of the entries are under the Direct Materials)

Answer 1

Delaware Chemical Company
Cost of Goods Sold Budget
For the Month Ending April 30, 2017
Finished goods inventory, April 1			18300
Work in process inventory, April 1		12200
Direct materials:
Direct materials inventory, April 1	14700
Direct materials purchases	1747200
Cost of direct materials available for use	1761900
Less direct materials inventory, April 30	16100
Cost of direct materials placed in production	1745800
Direct labor	209700
Factory overhead	314500
Total manufacturing costs		2270000
Total work in process during the period		2282200
Less work in process inventory, April 30		12600
Cost of goods manufactured			2269600
Cost of finished goods available for sale			2287900
Less finished goods inventory, April 30			17000
Cost of goods sold			2270900