Question

The following inventory and cost data for the just completed year are taken from the accounting...

The following inventory and cost data for the just completed year are taken from the accounting records of Sanka Company:
Inventories
Increase in raw materials 4,000
Increase in work in process 30,000 30,000
Decrease in finished goods 90,000 90,000
Costs incurred
Advertising expense 200,000
Direct labour cost 180,000
Purchases of raw materials 264,000
Rent, factory building 60,000
Indirect factory labour 112,600
Sales commissions 70,000
Utilities, factory 18,000
Maintenance, factory equipment 48,000
Supplies, factory 1,400
Depreciation, office equipment 16,000
Depreciation, factory equipment 80,000
Required:
(a.) Calculate the cost of goods manufactured.
(b.) Calculate the cost of goods sold

Homework Answers

Answer #1

(a) Schedule of Cost of goods manufactured

Purchases of raw material

264,000

Increase in raw materials

4,000

Raw materials used in production

268,000

Direct labor

180,000

Manufacturing overheads:

Rent, factory building 60,000
Indirect factory labour 112,600
Utilities, factory 18,000
Maintenance, factory equipment 48,000
Supplies, factory 1,400
Depreciation, factory equipment 80,000

Total manufacturing cost

768,000

Increase in work in process 30,000

Cost of goods manufactured

798,000

b)

Schedule of cost of goods sold

Cost of goods manufactured

798,000

Less: Decrease in finished goods

- 90,000

Cost of goods sold

$708,000

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