Question

Delaware Chemical Company uses oil to produce two types of plastic products, P1 and P2. Delaware budgeted 14,700 barrels of oil for purchase in June for $75 per barrel. Direct labor budgeted in the chemical process was $132,300 for June. Factory overhead was budgeted at $198,500 during June. The inventories on June 1 were estimated to be:

Oil	$9,300
P1	6,200
P2	5,300
Work in process	7,700

The desired inventories on June 30 were:

Oil	$10,200
P1	5,700
P2	5,000
Work in process	7,900

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

Delaware Chemical Company
Cost of Goods Sold Budget
For the Month Ending June 30
Finished goods inventory, June 1			11500	=6200+5300
Work in process inventory, June 1		7700
Direct materials:
Direct materials inventory, June 1	9300
Direct materials purchases	1102500			=14700*75
Cost of direct materials available for use	1111800
Less direct materials inventory, June 30	-10200
Cost of direct materials placed in production	1101600
Direct labor	132300
Factory overhead	198500
Total manufacturing costs		1432400
Total work in process during the period		1440100
Less work in process inventory, June 30		-7900
Cost of goods manufactured			1432200
Cost of finished goods available for sale			1443700
Less finished goods inventory, June 30			-10700	=5700+5000
Cost of goods sold			1433000