Question

Delaware Chemical Company uses oil to produce two types of plastic products, P1 and P2. Delaware budgeted 15,800 barrels of oil for purchase in June for $71 per barrel. Direct labor budgeted in the chemical process was $145,800 for June. Factory overhead was budgeted at $201,900 during June. The inventories on June 1 were estimated to be: Oil $10,200 P1 6,900 P2 5,800 Work in process 8,500 The desired inventories on June 30 were: Oil $11,200 P1 6,300 P2 5,500 Work in process 8,700 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

Answer 1

Solution

Delaware Chemical Company
Cost of Goods Sold Budget
For the Month Ending June 30
Finished goods inventory, June 1			$ 12,700
Work in process inventory, June 1		$ 8,500
Direct materials:
Direct materials inventory, June 1	$ 10,200
Direct materials purchases	$ 1,121,800
Cost of direct materials available for use	$ 1,132,000
Direct materials inventory, June 30	$ 11,200
Cost of direct materials placed in production	$ 1,120,800
Direct labor	$ 145,800
Factory overhead	$ 201,900
Total manufacturing costs		$ 1,468,500
Total work in process during the period		$ 1,477,000
Work in process inventory, June 30		$ 8,700
Cost of goods manufactured			$ 1,468,300
Cost of finished goods available for sale			$ 1,481,000
Finished goods inventory, June 30			$ 11,800
Cost of goods sold			$ 1,469,200