Question

Ashley Corporation provided the following list of cost data related to its manufacturing operations for the month of September 2020.
	Beginning raw materials inventory	$                872,500
	Raw materials purchased (net)	2,476,600
	Ending raw materials inventory	911,500
	Direct labor costs	299,800
	Indirect materials	136,000
	Indirect labor	75,800
	Factory utilities	469,000
	Factory depreciation	42,000
	Property taxes on office building only	3,600
	Property taxes on factory building only	5,200
	Property insurance on factory building only	6,100
	Factory maintenance	14,400
	Depreciation on office equipment	6,050
	Salaries for customer service personnel	101,000
	Beginning work in process	801,000
	Ending work in process	702,500
(a)	Arrange the cost data into a statement of cost of goods manufactured.
(b)	If Ashley's cost of goods sold for the month was $3,900,000, how much was the increase or decrease in finished goods inventory for the month of September?

Answer 1

a.

Schedule of Cost of Goods Manufactured
Beginning raw material inventory	872,500
Purchase of raw material	2,476,600
Total raw materials avaialbe	3,349,100
Ending raw material inventory	-911,500
Raw material used	2,437,600
Direct labor	299,800
Manufacturing Overheads:
Indirect materials	136,000
Indirect labor	75,800
Factory Utilities	469,000
Factory depreciation	42,000
Property taxes - Factory building	5,200
Property insurance -Factory building	6,100
Factory maintenance	14,400
Total Manufacturing Cost	3,485,900
Beginning work in process inventory	801,000
Ending work in process inventory	-702,500
Cost of goods manufactured	$3,584,400

b.

Cost of goods manufactured = $3,584,400

Cost of goods sold = $3,900,000

Decrease in finished goods inventory = Cost of goods sold - Cost of goods manufactured

= 3,900,000-3,584,400

= $315,600