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 | |||||
(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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