Question

The following data were taken from the records of Mavericks Inc, for the calendar year ended December 31, 2020.
		1-Jan	31-Dec
	Raw Materials Inventory	310,000	83,000
	Work in Process Inventory	161,000	103,750
	Finished Goods Inventory	22,000	57,600
	Additional Information:	Total Costs
	Raw Materials Purchases	301,250
	Direct Labor	315,000
	Indirect Labor	42,750
	Equipment Depreciation	61,000
	Utilities	50,750
	Other Costs	10,500
	Factory Manager's Salary	44,000
	SG&A Salary	85,500
	Insurance	10,500
	Factory Operations Cost:	% of total costs
	Utilities	60%
	Depreciation	55%
	Insurance	75%
	Other Costs	100%
	1. Prepare a cost of goods manufactured schedule as of December 31, 2020, in good form. (using excel)
	2. Provide a written Interpretation of the results

Answer 1

1.

Schedule of Cost of Goods manufactured
Direct Materials
Raw Material, Beginning Inventory	$         310,000
Add: Purchases	$         301,250
Total Raw Material Available	$         611,250
Deduct : Raw Material in inventory, ending	$           83,000
Raw Material used in production		$       528,250
Direct Labor		$       315,000
Manufacturing Overhead
Indirect Labor	$           42,750
Equipment Depreciation	$           33,550
Utilities Expense	$           30,450
Other Costs	$           10,500
Factory Managers Salary	$           44,000
Insurance	$             7,875	$       169,125
Total Manufacturing Costs		$    1,012,375
Add: Beginning Work in Process Inventory		$       161,000
		$    1,173,375
Deduct: Ending Work in Process Inventory		$       103,750
Cost of Goods Manufactured		$    1,069,625

2.
The costs that are related only to Factory operations for overhead is part of factory overhead used. The raw material used and direct labor cost are part of manufacturing costs as direct cost.