Question

# E18-23 Statement of Cost of Goods Manufactured from Percent Relationships Information about Blue Line Products Company...

E18-23 Statement of Cost of Goods Manufactured from Percent Relationships Information about Blue Line Products Company for the year ending December 31, 2017, follows: • Sales equal \$475,000. • Direct materials used total \$68,000. • Manufacturing overhead is 150 percent of direct labor dollars. • The beginning inventory of finished goods is 20 percent of the cost of goods sold. • The ending inventory of finished goods is twice the beginning inventory. • The gross profit is 20 percent of sales. • There is no beginning or ending work in process. Required Prepare a statement of cost of goods manufactured for 2017. (Hint: Prepare an analysis of changes in Finished Goods Inventory.)

 BLUE LINE PRODUCTS COMPANY Calculations Statement of Cost of Goods Manufactured For the Year Ending December 31, 2017 Current manufacturing costs: Direct materials 68000 Direct labor 155200 =(456000-68000)/(100%+150%) Manufacturing overhead 232800 456000 =155200*150% Beginning work-in-process 0 Total costs in process 456000 Ending work-in-process 0 Cost of goods manufactured 456000 Analysis of Finished Goods Inventory: Finished goods, 1/1/17 76000 =380000*20% Cost of goods manufactured 456000 =532000-76000 Total goods available for sale 532000 =380000+152000 Finished goods, 12/31/17 152000 =76000*2 Cost of goods sold 380000 =475000*(1-20%)

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