Partridge, Inc. incurred the following costs during March: Raw materials purchased $ 46,800 Direct labor (9,200...

Partridge, Inc. incurred the following costs during March:

Raw materials purchased $ 46,800

Direct labor (9,200 hours) 156,400

Manufacturing overhead (actual) 83,000

Selling expenses 47,400

Administrative expenses 32,600

Interest expense 14,800

Manufacturing overhead is applied on the basis of $8.50 per direct labor hour. Assume that overapplied or underapplied overhead is transferred to cost of goods sold only at the end of the year. During the month, 3,500 units of product were manufactured and 3,400 units of product were sold. On March 1 and March 31, Partridge carried the following inventory balances:

March 1 / March 31

Raw materials $ 14,200 $ 15,400

Work-in-process 64,700 55,800

Finished process 32,400 40,660

(a.) Prepare a Statement of Cost of Goods Manufactured for the month of March, and calculate the average cost per unit produced.

(b.) Calculate the cost of goods sold during March.

(c.) Where in the financial statements will the difference between cost of goods manufactured and cost of goods sold be classified?

Solutions

Expert Solution

Schedule of Cost of Goods Manufactured
Beginning raw material inventory	$14,200
Add: Raw material purchases	46,800
Raw material available	61,000
Less: Ending raw material inventory	(15,400)
Direct material used	45,600
Direct labor	156,400
Manufacturing overhead applied (9,200*$8.5)	78,200
Total manufacturing cost		$280,200
Beginning work in process inventory		64,700
Ending work in process inventory		(55,800)
Cost of goods manufactured		$289,100
Number of units manufactured		3,500
Average cost per unit produced		$82.6

b. Cost of goods sold:

Cost of goods manufactured	$289,100
Add: Beginning finished goods	32,400
Cost of goods available for sale	321,500
Less: Ending finished goods	(40,660)
Cost of goods sold	$280,840

The difference between cost of goods manufactured and cost of goods sold is ending finished goods inventory will be shown in inventories in assets side of balance sheet

ekkarill92 answered 1 year ago

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