Question

Lopez Corporation incurred the following costs while manufacturing its product.

Materials used in product		$130,000		Advertising expense		$46,100
Depreciation on plant		64,500		Property taxes on plant		20,000
Property taxes on store		7,600		Delivery expense		26,800
Labor costs of assembly-line workers		120,900		Sales commissions		39,300
Factory supplies used		32,600		Salaries paid to sales clerks		54,900

Work in process inventory was $14,000 at January 1 and $16,700 at December 31. Finished goods inventory was $61,800 at January 1 and $49,800 at December 31.

1. compute cost of goods manufactured.

2. compute cost of goods sold

Answer 1

1. Cost of Goods Manufactured:-

Lopez Corporation
Materials used in product (A)		130,000
Labor costs of assembly-line workers (B)		120,900
Add: manufacturing/Factory Overheads: (C)		117,100
Depreciation on plant	64,500
Factory supplies used	32,600
Property taxes on plant	20,000
Total Manufacturing Cost (D)=(A)+(B)+(C)		368,000
Add:WIP beginning(E)		14,000
Less: WIP ending(F)		(16,700)
Cost of goods manufactured(G)=(D)+(E)-(F)		365,300

2. Cost of goods Sold

Cost of goods manufactured(G)	365,300
Add: Finished Goods inventory, beginning(H)	61,800
Less:Finished Goods inventory,ending(I)	(49,800)
Cost of goods Sold(J)=(G)+(H)-(I)	377,300