Question

The following data is provided for Garcon Company and Pepper Company.

	Garcon Company					Pepper Company
Beginning finished goods inventory		$	14,900			$	17,950
Beginning work in process inventory			18,000				21,150
Beginning raw materials inventory (direct materials)			8,700				15,000
Rental cost on factory equipment			27,750				26,500
Direct labor			23,000				44,600
Ending finished goods inventory			18,950				16,100
Ending work in process inventory			25,300				18,200
Ending raw materials inventory			5,300				7,400
Factory utilities			11,250				16,750
Factory supplies used (indirect materials)			11,800				4,600
General and administrative expenses			25,000				52,500
Indirect labor			1,900				8,260
Repairs—Factory equipment			6,620				3,450
Raw materials purchases			45,500				52,500
Selling expenses			53,200				49,900
Sales			229,530				345,010
Cash			32,000				15,700
Factory equipment, net			272,500				130,825
Accounts receivable, net			17,000				20,450

Exercise 18-8 Cost of goods manufactured and cost of goods sold computation LO P1, P2

Required:
1. Complete the table to find the cost of goods manufactured for both Garcon Company and Pepper Company for the year ended December 31, 2019.
2. Complete the table to calculate the cost of goods sold for both Garcon Company and Pepper Company for the year ended December 31, 2019.

Answer 1

1

	Garcon Company	Pepper Company
Direct materials
Beginning raw material inventory	$                        8,700	$                      15,000
Add: Raw materials purchased	$                      45,500	$                      52,500
Raw material available for use	$                      54,200	$                      67,500
Less: Ending raw material inventory	$                        5,300	$                         7,400
Direct material used	$                      48,900	$                      60,100
Direct labor	$                      23,000	$                      44,600
Factory overhead
Factory utilities	$                      11,250	$                      16,750
Rental cost on factory equipment	$                      27,750	$                      26,500
Factory supplies used	$                      11,800	$                         4,600
Indirect labor	$                        1,900	$                         8,260
Repairs - Factory equipment	$                        6,620	$                         3,450
Total manufacturing cost	$                   131,220	$                    164,260
Add: Beginning work in process inventory	$                      18,000	$                      21,150
Total cost of work in process	$                   149,220	$                    185,410
Less: Ending work in process inventory	$                      25,300	$                      18,200
Cost of goods manufactured	$                   123,920	$                    167,210

2.

	Garcon Company	Pepper Company
Beginning finished goods inventory	$                      14,900	$                      17,950
Add: Cost of goods manufactured	$                   123,920	$                    167,210
Cost of goods available for sale	$                   138,820	$                    185,160
Less: Ending finished goods inventory	$                      18,950	$                      16,100
Cost of goods sold	$                   119,870	$                    169,060

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