Question

Cost of Goods Sold Budget

Delaware Chemical Company uses oil to produce two types of plastic products, P1 and P2. Delaware budgeted 16,900 barrels of oil for purchase in June for $63 per barrel. Direct labor budgeted in the chemical process was $117,100 for June. Factory overhead was budgeted at $191,600 during June. The inventories on June 1 were estimated to be:

Oil	$8,200
P1	5,500
P2	4,700
Work in process	6,800

The desired inventories on June 30 were:

Oil	$9,000
P1	5,000
P2	4,400
Work in process	7,000

Use the preceding information to prepare a cost of goods sold budget for June. For those boxes in which you must enter subtracted or negative numbers use a minus sign.

Delaware Chemical Company
Cost of Goods Sold Budget
For the Month Ending June 30
			$
		$
Direct materials:
	$
	$
	$
		$
			$
			$
			$

Answer 1

DELWARE CHEMICAL COMPANY
	Cost of goods sold Budget
For the month ended June 30th
			Amount
Finished Goods Inventory 1st,June			$              10,200.00
Beginning Work in Process Inventory		$                                                         6,800.00
Direct Material
Beginning Raw Material	$                 8,200.00
Add: Raw Material Purchase	$        10,64,700.00
Total Raw Material available ($8200+$1064700)	$        10,72,900.00
Less: Ending Raw Material Inventory	$               -9,000.00
Raw Material used in Production($1072900-$9000)	$        10,63,900.00
Direct Labor	$           1,17,100.00
Factory Overhead	$           1,91,600.00
Total Manufacturing cost($1063900+$117100+$191600)		$                                                 13,72,600.00
Less: Ending WIP Inventory		$                                                        -7,000.00
Cost of goods manufactured($6800+$1372600-7000)			$        13,72,400.00
Cost of Finished goods available for use			$        13,82,600.00
Less: Ending Finished goods Inventory			$              -9,400.00
Cost of goods sold($10200+1372400-$9400)			$        13,73,200.00
Beginning Finished goods Inventory=P1=5500 and P2=4700=(5500+4700)
Ending Finished goods Inventory=P1=5000 and P2=4400=(5000+4400)
Raw Material Purchase=(16900 barrels @$63)
Formula:
Direct Material
Beginning Raw Material Inventory
Add: Purchases
Total raw material available
Less: Ending Raw Material
Raw Material used in Production
Direct Labor
Manuafcturing Overhead
Total Manufacturing Cost
Add: Work in Process January 1st,
Total
Less: Work in Process Ending Dec 31st
Cost of goods manufactured
Formula
Beginning Finished goods Inventory=(A)
Add: Cost of goods manufactured=(B)
Cost of goods avaialable for sale(C)=(A)+(B)
Less: Ending Finished goods Inventory=(D)
Cost of goods sold (E )=(C)-(D)