Question

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Crunchem Cereal Company incurred the following actual costs during 20x1.

Direct material used	$	275,000
Direct labor		130,000
Manufacturing overhead		273,000

The firm’s predetermined overhead rate is 210 percent of direct-labor cost. The January 1 inventory balances were as follows:

Raw material	$	29,000
Work in process		39,000
Finished goods		44,000

Each of these inventory balances was 10 percent higher at the end of the year.

Required:
1. Prepare a schedule of cost of goods manufactured for 20x1.

Answer 1

SCHEDULE OF COST OF GOODS MANUFACTURED

The cost of goods manufactured schedule is used to calculate the cost of producing products for a period of time.

SCHEDULE OF COST OF GOODS MANUFACTURED for the year ended 31 December 20x1
direct materials used in production	275000
direct labor	130000
manufacturing overhead	273000
total manufacturing costs	678000
add beginning work in process inventory	39,000
less ending work in process inventory(10% higher than the opening balance )	42900
cost of goods manufactured	674100