Question

Hayward Company, a manufacturing firm, has supplied the following information from its accounting records for the month of May:

Direct labor cost	$10,500
Purchases of raw materials	15,000
Supplies used	675
Factory insurance	350
Commissions paid	2,500
Factory supervision	2,225
Advertising	800
Material handing	3,750
Materials inventory, May 1	3,475
Work-in-process inventory, May 1	12,500
Finished goods inventory, May 1	6,685
Materials inventory, May 31	9,500
Work-in-process inventory, May 31	14,250
Finished goods inventory, May 31	4,250

	Required:
1.	Prepare a statement of cost of goods manufactured.
2.	Prepare a statement of cost of goods sold.

Answer 1

Solution 1:

Schedule of Cost of Goods Manufactured
Particulars	Details	Amount
Manufacturing Costs:
Materials inventory, May 1	$3,475.00
Add:Purchases of raw material	$15,000.00
Total Material Available	$18,475.00
Less: Materials inventory, May 31	$9,500.00
Raw material consumption		$8,975.00
Direct labor Cost		$10,500.00
Factory Overhead:
Supplies used	$675.00
Factory Insurance	$350.00
Factory Supervision	$2,225.00
Material Handling	$3,750.00
Total Factory overhead		$7,000.00
Total Manufacturing Costs		$26,475.00
Add: Work-in-process inventory, May 1		$12,500.00
Less: Work-in-process inventory, May 31		$14,250.00
Cost of goods manufactured		$24,725.00

Solution 2:

Schedule of Cost of Goods Sold
Particulars	Amount
Cost of goods manufactured	$24,725.00
Add: Finished goods inventory, May 1	$6,685.00
Less: Finished goods inventory, May 31	$4,250.00
Cost of Goods Sold	$27,160.00