Question

Sales			550,000
	Lubricants for factory machines			2,790
	Rent, factory building			34,580
	Depreciation of office equipment			3,280
	Direct Labor			75,000
	Indirect materials			1,650
	Sales Commissions			56,740
	Factory utilities			5,400
	Manufacturing overhead applied			67,000
	Insurance, factory			12,000
	Rent, office			18,900
	Purchases of Raw Materials			183,000
	Work in Process, beginning			8,250
	Work in Process, ending			13,900
	Raw materials, beginning			23,000
	Raw materials, ending			17,500

Prepare the Schedule of Cost of Goods Manufactured.

Answer 1

Solution

Schedule of Cost of Goods Manufactured
Direct Material
Raw material Inventory Beginning	$ 23,000
Raw material Purchased	$ 183,000
Raw material available for use	$ 206,000
Less: Raw material Inventory Ending	$ 17,500
Direct Material Used		$ 188,500
Direct labor		$ 75,000
Total Manufacturing overheads applied		$ 67,000
Total manufacturing Cost During the month		$ 330,500
Add: Work in process Beginning		$ 8,250
Total Work in Process		$ 338,750
Less: Work in progress Ending		$ 13,900
Cost of Goods Manufactured		$ 324,850

Alternate solution assuming Indirect material is included in raw material purchase

Schedule of Cost of Goods Manufactured
Direct Material
Direct material Inventory Beginning	$ 23,000
Direct material Purchased	$ 181,350
Direct material available for use	$ 204,350
Less: Direct material Inventory Ending	$ 17,500
Direct Material Used		$ 186,850
Direct labor		$ 75,000
Total Manufacturing overheads applied		$ 67,000
Total manufacturing Cost During the month		$ 328,850
Add: Work in process Beginning		$ 8,250
Total Work in Process		$ 337,100
Less: Work in progress Ending		$ 13,900
Cost of Goods Manufactured		$ 323,200