Question

Compute the Cost of Goods Manufactured and Cost of Goods Sold for Crystal Bay Company for the most recent year using the amounts described next. Assume that Raw Materials Inventory contains only direct materials.

Beginning of year ($) End of year ($)
Raw materials inventory 26,000 33,000
Work in process Inventory 35,000 31,000
Finished good inventory 14,000 29,000
Purchase of direct materials 73,000
Direct labor 86,000
Indirect labor 40,000
Insurance in plant 10,000
Dereciation-plant and equipment 13,200
Repairs and maintenance - Plant 4,200
Marketing expense 76,000
General and administrative expenses 27,500

Answer 1

Cost of good manufactured=$223400

Cost of goods sold=$208400

Step-by-step explanation:

To calculate the cost of manufactured goods we need to use the following formula:

Cost of good manufactured= Beginning work in progress+ direct materials of the period + direct labor + manufactured overhead - ending work in progress

Beginning work in progress= $35000

Direct materials = beginning inventory + purchase - ending inventory= 26000+ 73000 - 33000= 66000

Direct labor= 86000

Manufactured overhead= Indirect labor+Insurance in plant+Dereciation+Repairs and maintenance=40000+10000+13200+4200= 67400

Ending work in progress= 31000

Cost of good manufactured= 35000+66000+86000+67400-31000=$223400

The cost of goods sold refers to the direct costs attributable to the production of the goods sold in a company. This amount includes the cost of the materials used in creating the goods along with the direct labor costs used to produce the goods. It excludes indirect expenses, such as distribution costs and sales force costs.

COGS=Beginning Inventory+Production during period−Ending Inventory

COGS=14000+223400-29000=$208400