Question

Lopez Corporation incurred the following costs while manufacturing its product. Materials used in product $129,400 Advertising expense $46,700 Depreciation on plant 63,100 Property taxes on plant 19,100 Property taxes on store 8,510 Delivery expense 29,900 Labor costs of assembly-line workers 114,900 Sales commissions 38,300 Factory supplies used 27,900 Salaries paid to sales clerks 59,000 Work in process inventory was $13,300 at January 1 and $17,000 at December 31. Finished goods inventory was $69,700 at January 1 and $48,400 at December 31.

a) Compute cost of goods manufactured.

b) Compute cost of goods sold.

Answer 1

Cost Of Goods manufactured
Material Cost	$ 129,400.00
Direct Labor	$ 114,900.00
Manufacturing Overheads
Depreciation on Plant	$    63,100.00
Property taxes on Plant	$    19,100.00
Factory Supplies	$    27,900.00
Total Manufacturing Overheads	$ 110,100.00
Total manufacturing cost	$ 354,400.00
Add: Work in Progress, January 1	$    13,300.00
Total WIP	$ 367,700.00
Less: Work in Progress, Dec 31	$    17,000.00
Cost Of Goods manufactured	$ 350,700.00

Cost of Goods Sold
Opening Stock	$    69,700.00
Cost of Goods manufactured	$ 350,700.00
Goods Available for sale	$ 420,400.00
Less: Closing Stock of Finished goods	$    48,400.00
Cost of Goods Sold	$ 372,000.00

*Advertising expense, Property taxes on store, Delivery expenses, sales commission and salaries paid to ales clerk are Indirect cost and will be shown in Income statement.