Question

Statement of Cost of Goods Manufactured from Percent Relationships Information about NuWay Products Company for the year ending December 31, 2010, follows: Sales equal $600,000. Direct materials used total $54,000. 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. Prepare a statement of cost of goods manufactured for 2010. (Hint: Prepare an analysis of changes in Finished Goods Inventory.) Do not use negative signs with any of your answers below. NuWay Products Company Statement of Cost of Goods Manufactured For the Year Ending December 31, 2010 Current manufacturing costs: Direct materials $Answer Direct labor Answer Manufacturing overhead Answer Answer Beginning work-in-process Answer Total costs in process Answer Ending work-in-process Answer Cost of goods manufactured $Answer Analysis of Finished Goods Inventory: Finished goods, 1/1/10 $Answer Cost of goods manufactured Answer Total goods available for sale Answer Finished goods, 12/31/10 Answer Cost of goods sold $Answer

Answer 1

NuWAY PRODUCTS COMPANY
Statement of Cost of Goods Manufactured
For the Year Ending December 31, 2010
Current manufacturing costs:			Workings
Direct materials	54000
Direct labor	208800		=(576000-54000)/(100%+150%)
Manufacturing overhead	313200	576000	=208800*150%
Beginning work-in-process		0
Total costs in process		576000
Ending work-in-process		0
Cost of goods manufactured		576000
Analysis of Finished Goods Inventory:
Finished goods, 1/1/10		96000	=480000*20%
Cost of goods manufactured		576000	(672000-96000)
Total goods available for sale		672000
Finished goods, 12/31/10		192000	=96000*2
Cost of goods sold		480000	=600000*(1-20%)