Question

Use the following information for a manufacturer to compute cost of goods manufactured and cost of goods sold:

(Click the icon to view the information.)
First, compute cost of goods manufactured.
Schedule of Cost of Goods Manufactured
Beginning Work-in-Process Inventory $42,000
Direct Materials Used:
Beginning Direct Materials $28,000 Purchases of Direct Materials 70,000
Direct Materials Available for Use 98,000 Ending
Direct Materials (30,000)
Direct Materials Used $68,000
Direct Labor 86,000
Manufacturing Overhead 38,000
Total Manufacturing Costs Incurred during the Year 192,000
Total Manufacturing Costs to Account For 234,000
Ending Work-in-Process Inventory (35,000)
Cost of Goods Manufactured $199,000
Now compute cost of goods sold.
Cost of Goods Sold Direct Materials Available for Use 98000 Cost of Goods Manufactured 199000
Cost of Goods Available for Sale
Total Operating Costs
Cost of Goods Sold

Answer 1

Results are below.

Step-by-step explanation:

First, we need to calculate the cost of goods manufactured using the following formula:

cost of goods manufactured= beginning WIP + direct materials + direct labor + allocated manufacturing overhead - Ending WIP

cost of goods manufactured= 42,000 + (28,000 + 70,000 - 30,000) + 86,000 + 38,000 - 35,000

cost of goods manufactured= $199,000

Now, the cost of goods sold:

COGS= beginning finished inventory + cost of goods manufactured - ending finished inventory

We do not have information regarding the beginning and ending finished goods inventory. But, suppose the beginning inventory equals $45,000 and the ending inventory $30,000:

COGS= 45,000 + 199,000 - 30,000

COGS= $214,000