Sales and Production Budgets
The Taipei Manufacturing Company is in the process of preparing a budgeted schedule of cost of goods manufactured for May 2017. The following data has been gathered:
Sales Revenue……………… $2,000
Direct Materials Purchased…. 500
Direct Labor……… 600
Allocated Factory Overhead… 400
Inventory Levels:
May 1 May 31
Direct Materials $70 $50
Work in Process 20 10
Finished Goods 50 40
Required:
b. What is the budgeted cost of goods manufactured for May?
c. What is the budgeted cost of goods sold for May?
a.
Direct Materials , beginning | 70 |
Direct material purchased | 500 |
Total direct material available | 570 |
Direct Materials , ending | -50 |
Direct material used | $520 |
Direct material usage for may = $520
b.
Schedule of cost of goods manufactured
Direct material used | 520 |
Direct Labor | 600 |
Allocated Factory Overhead | 400 |
Total manufacturing cost | 1,520 |
Work in Process , beginning | 20 |
Work in Process , ending | -10 |
cost of goods manufactured | $1,530 |
cost of goods manufactured = $1,530
c.
Schedule of cost of goods sold
Finished Goods, beginning | 50 |
cost of goods manufactured | 1,530 |
Cost of goods available for sale | 1,580 |
Finished Goods, ending | -40 |
cost of goods sold | $1,540 |
cost of goods sold = $1,540
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