Question

Cost of Goods Sold Budget

Delaware Chemical Company uses oil to produce two types of plastic products, P1 and P2. Delaware budgeted 23,400 barrels of oil for purchase in June for $70 per barrel. Direct labor budgeted in the chemical process was $180,200 for June. Factory overhead was budgeted at $294,800 during June. The inventories on June 1 were estimated to be:

Oil	$12,600
P1	8,500
P2	7,200
Work in process	10,500

The desired inventories on June 30 were:

Oil	$13,900
P1	7,700
P2	6,800
Work in process	10,800

Use the preceding information to prepare a cost of goods sold budget for June. For those boxes in which you must enter subtracted or negative numbers use a minus sign.

Delaware Chemical Company
Cost of Goods Sold Budget
For the Month Ending June 30
			$
		$
Direct materials:
	$
	$
	$
		$
			$
			$
			$

Answer 1

Solution:

Delaware Chemical Company Cost of Goods Sold Budget For the Month Ending June 30
Particulars	Amount($)	Amount($)	Amount($)
Finished goods inventory, June 1 (p1+p2)			$15,700
Work in process inventory, June 1		$10,500
Direct materials:
Direct materials inventory, June 1	$12,600
Direct materials purchases (23,400*$70)	$1,638,000
Cost of direct materials available for use	$1,650,600
Less: Direct materials inventory, June 30	- $13,900
Cost of direct materials placed in production	$1,636,700
Direct labor	$180,200
Factory overhead	$294,800
Total manufacturing costs		$2,111,700
Total work in process during the period		$2,122,200
Less: Work in process inventory, June 30		- $10,800
Cost of goods manufactured			$2,111,400
Cost of finished goods available for sale			$2,127,100
Less: Finished goods inventory, June 30 (p1+p2)			- $14,500
Cost of goods sold			$2,112,600