Question

Statement of Cost of Goods Manufactured for a Manufacturing Company Cost data for Johnstone Manufacturing Company for the month ended March 31 are as follows:

Inventories March 1 March 31
Materials $178,750 $151,940
Work in process 119,760 101,800
Finished goods 91,160 103,320
Direct labor $321,750
Materials purchased during March 343,200
Factory overhead incurred during March:
Indirect labor 34,320
Machinery depreciation 20,740
Heat, light, and power 7,150
Supplies 5,720
Property taxes 5,010
Miscellaneous costs 9,300

Required:
a. Prepare a cost of goods manufactured statement for
b. Determine the cost of goods sold for March.

Answer 1

Answer and Explanation:

a. The preparation of the cost of goods manufactured statement is as follows:

Opening work in process $119,760

Direct Material

Opening inventory $178,750

Add: Material Purchased $343,200

Cost of Materials Available $521,950

Less: Ending Inventory -$151,940

Cost of Direct Materials Used $370,010

Direct Labor $321,750

Factory Overhead:

Indirect Labor $34,320

Machinery Depreciation $20,740

Heat, Light and Power $7,150

Supplies $5,720

Property Taxes $5,010

Miscellaneous Costs $9,300

Total Factory Overhead $82,240

Total Manufacturing Costs Incurred $774,000

Total Manufacturing Costs $893,760

Less: Ending Work in Process $101,800

Cost of Goods Manufactured $791,960

b. Now the cost of goods sold is

Cost of Goods Sold= Cost of Goods Manufactured + Beginning Finished Goods - Ending Finished Goods

= $791,960 + $91,160 - $103,320

= $779,800