Question

The following information is from ABC Company’s general ledger: Beginning and ending inventories, respectively, for raw materials were $8,600 and $10,600 and for work in process were $20,600 and $22,600. Raw material purchases and direct labor costs incurred were $36,600 each, and manufacturing overhead applied amounted to $20,600. Required: Prepare a statement of cost of goods manufactured for ABC Company. (Amounts to be deducted should be indicated by a minus sign.)

Answer 1

Solution:

ABC Company Statement of cost of goods manufactured
Particulars	Amount($)	Amount($)
Raw materials:
Raw materials inventory, beginning	$8,600
Purchases	$36,600
Total raw materials available		$45,200
Less: Ending of raw materials	($10,600)
Total raw materials used		$34,600
Direct labor	$36,600
Manufacturing overhead	$20,600
Total manufacturing costs		$91,800
Add: Beginning of work in process	$20,600
		$112,400
Less: Ending of work in process	($22,600)
Cost of goods manufactured		$89,800