Question

The following cost and inventory data are taken from the accounting records of Mason Company for the year just completed: Costs incurred: Direct labour cost Purchases of raw materials Indirect labour Maintenance, factory equipment Advertising expense Insurance, factory equipment Sales salaries Rent, factory facilities Supplies Depreciation, office equipment Depreciation, factory equipment $ 85,000 135,000 37,500 7,500 105,000 1,950 65,000 31,500 6,100 28,500 5,000 Beginning of the Year End of the Year Inventories: Raw materials Work in process Finished goods $ 9,500 11,800 39,600 $18,000 6,650 24,750 Required: 1. Prepare a schedule of cost of goods manufactured, MASON COMPANY Schedule of Cost of Goods Manufactured Direct materials

Answer 1

To calculate the cost of goods manufactured for Mason Company, direct materials used are computed by considering the beginning and ending inventories of raw materials, and purchases made. Direct labor and manufacturing overhead costs are added to this, excluding non-manufacturing expenses. The total cost of goods manufactured is determined to be $306,200.

Step-by-step explanation:

To prepare the schedule of cost of goods manufactured for Mason Company, we first calculate the total direct materials used by adding the beginning raw materials inventory to the purchases of raw materials and then subtracting the ending raw materials inventory:

1. Beginning Raw Materials Inventory: $9,500
2. Add: Purchases of Raw Materials: $135,000
3. Subtotal: $144,500
4. Less: Ending Raw Materials Inventory: $18,000
5. Total Direct Materials Used: $126,500

Next, we add the direct labor cost and manufacturing overhead, which includes indirect labor, maintenance of factory equipment, factory insurance, rent of factory facilities, factory supplies, and depreciation of factory equipment. We do not include advertising expense, sales salaries, or depreciation of office equipment as these are not part of manufacturing overhead.

1. Direct Labor Cost: $85,000
2. Manufacturing Overhead:
3. Indirect Labor: $37,500
4. Maintenance, Factory Equipment: $7,500
5. Insurance, Factory Equipment: $1,950
6. Rent, Factory Facilities: $31,500
7. Supplies: $6,100
8. Depreciation, Factory Equipment: $5,000
9. Total Manufacturing Overhead: $89,550
10. Total Manufacturing Costs: $301,050
11. Add: Beginning Work In Process Inventory: $11,800
12. Less: Ending Work In Process Inventory: $6,650
13. Cost of Goods Manufactured: $306,200

The cost of goods manufactured is therefore $306,200.