Question

Borges Distributors has the following information for January:

Cost of direct materials used in production $25,000

Direct labor 35,000

Factory overhead 20,000

Work in process inventory, 1/1 30,000

Work in process inventory, 1/31 25,000

Finished goods inventory, 1/1 15,000

Finished goos inventory, 1/31 12,000

Determine a) the cost of goods manufactured, and b) the cost of goods sold for January

Answer 1

a) cost of goods manufactured and b) the cost of goods sold for January is calculated as follows:

	$
Direct Material used in Production	25,000
Direct Labour	35,000
Factory Overhead	20,000
Total Manufacturing Cost	80,000
Add: Begining Work In Process	30,000
Less: Ending Work In Process	(25,000)
Cost of goods manufactured	$85,000
Add: Begining finished goods inventory	15,000
Less:Ending finished goods inventory	(12,000)
Cost of Goods Sold	$88,000

a)Cost of goods manufactured for January is $85,000

b)Cost of Goods Sold for January is $88,000