Question

Cost of Goods Sold, Cost of Goods Manufactured. PLEASE EXPLAIN AND BOLD ANSWERS

Timbuk 3 Company has the following information for March:

Cost of direct materials used in production	$44,000
Direct labor	54,000
Factory overhead	28,000
Work in process inventory, March 1	32,000
Work in process inventory, March 31	31,600
Finished goods inventory, March 1	23,000
Finished goods inventory, March 31	15,000

a. For March, determine the cost of goods manufactured.

Using the data given, prepare a statement of Cost of Goods Manufactured.

Timbuk 3 Company
Statement of Cost of Goods Manufactured
		$
	$
Total manufacturing costs incurred during March
Total manufacturing costs		$
Cost of goods manufactured		$

b. For March, determine the cost of goods sold.

Using the data given, prepare a statement of Cost of Goods Sold.

Timbuk 3 Company
Statement of Cost of Goods Sold
	$
	$
Cost of goods sold	$

Answer 1

a.statement of cost of goods manufactured.

	amount	amount
work in process inventory March 1		32,000
direct materials	44,000
direct labour	54,000
factory overhead	28,000
total manufacturing cost incurred during march (44,000+54,000+28,000)		126,000
total manufacturing cost(126,000 +32,000)		158,000
less:work in process inventory march 31		(31,600)
cost of goods manufactured		126,400

b.cost of goods sold.

finished goods inventory march 1	23,000
add: cost of goods manufactured	126,400
cost of goods available for sale	149,400
less: cost of goods manufactured	(15,000)
cost of goods sold	134,400