Question

The following account balances at the beginning of January were selected from the general ledger of Ocean City Manufacturing? Company:

Work in process inventory	?$0
Raw materials inventory	$ 28 comma 200$28,200
Finished goods inventory	$ 40 comma 000$40,000

Additional? data:

1. Actual manufacturing overhead for January amounted to

$ 65 comma 500$65,500.

2. Total direct labor cost for January was

$ 63 comma 400$63,400.

3. The predetermined manufacturing overhead rate is based on direct labor cost. The budget for the year called for

$ 252 comma 000$252,000

of direct labor cost and

$ 327 comma 600$327,600

of manufacturing overhead costs.

4. The only job unfinished on January 31 was Job No.? 151, for which total direct labor charges were

$ 5 comma 500$5,500

?(1 comma 1001,100

direct labor? hours) and total direct material charges were

$ 14 comma 400$14,400.

5. Cost of direct materials placed in production during January totaled

$ 123 comma 700$123,700.

There were no indirect material requisitions during January.

6. January 31 balance in raw materials inventory was

$ 35 comma 200$35,200.

7. Finished goods inventory balance on January 31 was

$ 35 comma 300$35,300.

What is the cost of goods sold for? January?

Answer 1

Solution:

Ocean City Manufacturing? Company
Schedule of cost of goods sold
Particulars	Details	Amount
Direct Material:
Beginning material inventory	$28,200.00
Cost of material purchased	$130,700.00
Cost of material available	$158,900.00
Less: Ending material inventory	$35,200.00
Direct material used		$123,700.00
Direct labor		$63,400.00
Manufacturing overhead applied ($63,400*130%)		$82,420.00
Total manufacturing cost for the year		$269,520.00
Add: Beginning WIP		$0.00
Total cost of work in process during the year		$269,520.00
Less: Ending WIP ($14,400 + $5,500 + $5,500*130%)		$27,050.00
Cost of goods manufactured		$242,470.00
Add: Beginning finished goods inventory		$40,000.00
Cost of goods available for sale		$282,470.00
Less: Ending finished goods inventory		$35,300.00
Unadjusted Cost of goods sold		$247,170.00
Less Overapplied overhead ($82,420 - $65,500)		$16,920.00
Adjusted cost of goods sold		$230,250.00