Question
In: Accounting
In the Schedule of Cost of Goods Manufactured and Cost of Goods Sold, the cost of...
In the Schedule of Cost of Goods Manufactured and Cost of Goods Sold, the cost of goods manufactured is computed according to which of the following equations?
Multiple Choice
Cost of goods manufactured = Total manufacturing costs + Beginning finished goods inventory – Ending finished goods inventory
Cost of goods manufactured = Total manufacturing costs + Beginning work in process inventory – Ending work in process inventory
Cost of goods manufactured = Total manufacturing costs + Ending work in process inventory – Beginning work in process inventory
Cost of goods manufactured = Total manufacturing costs + Ending finished goods inventory – Beginning finished goods inventory
Solutions
Expert Solution
In the Schedule of Cost of Goods Manufactured and Cost of Goods Sold, the cost of goods manufactured is computed according to the following formula
| Cost of goods manufactured = Total manufacturing costs + Beginning work in process inventory – Ending work in process inventory |
Reasons
1. Total manufacturing costs is added as it is obvious that current year cost includes the manufacturing cost.
2. Beginning work in process inventory is added as it is the unfinished stock of good at the starting, on which further manufacturing is to be done to manufacture, the cost of which is included in 1.
3. 'Ending work in process inventory' is subtracted as this repressents the Work in process items which has not been fully manufacture in the current year.
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Pre-determined manufacturing overhead rate = Total estimated
manufacturing overheads / Estimated direct labor hours = = $3600/12
hours = $300 per direct labor hour
Step 2:
Cost Sheet
Job # 1
Direct materials $
Table top
2000
Legs ($650 x 4)
2600
Drawer
0
4600
Direct labor cost @ $20 per hour
(3x2x$30)
180
Manufacturing overheads...
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Listed below is information related to RRR Co’s manufacturing
activities for the month of October 2020.
Ending
Balance
Beginning Balance
Materials
Inventory
$197,000
$
211,000
Work in Process
Inventory
59,000
78,000
Finished Goods
Inventory
91,000
82,000
During October 2020, RRR Company purchased $105,000 of raw
materials and incurred direct labor costs of $77,100. The...
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is information related to Danbury Co’s manufacturing activities for
the month of July 2016. Ending Balance Beginning Balance Materials
Inventory $7,500 $ 6,000 Goods in Process Inventory 11,000 2,000
Finished Goods Inventory 10,000 9,000 During July 2016, Danbury
Company purchased $20,000 of raw materials and incurred direct
labor costs of $14,160. The company applies overhead at a rate of
50%...
Preparation of a Schedule of Cost of Goods Manufactured and Cost of Goods Sold The following...
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The following cost and inventory data for the year just
completed are taken from the accounting records of Eccles
Company:
Costs incurred:
Advertising expense ...........................$100,000
Direct labour cost ..................................$80,000
Purchases of raw materials ................$137,000
Rent, factory building ............................$80,000
Indirect labour
.......................................$56,300
Sales commissions................................$35,000
Utilities, factory
........................................$9,000
Maintenance, factory equipment ...........$24,000
Supplies, factory ........................................
$700
Depreciation, office equipment.................$8,000
Depreciation, factory equipment ............$40,000
Beginning
End
of...
Schedule of cost of goods manufactured
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The following amounts are available for 2016 for Bourne
Manufacturing Company:
Administrative salaries (non-factory)
$210,000
Administrative rent (non-factory)
105,000
Advertising and promotion expense
123,000
Depreciation-administrative
66,000
Depreciation-factory
90,000
Depreciation-selling
51,000
Direct labor
525,000
Factory rent
54,000
Factory supplies used
36,000
Finished goods inventory (January 1)
171,000
Finished goods inventory (December 31)
156,000
Indirect material used
42,000
Indirect labor
57,000
Materials inventory (January 1)
39,000
Materials inventory (December 31)
60,000
Net delivered cost...
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2017.
Raw Materials Inventory
Begin. Inv.
12,500
Purchases
55,000
Avail. for use
67,500
DM used
49,000
End. Inv.
18,500
Work in Process Inventory
Begin. Inv.
17,400
DM used
49,000
Direct labor
31,700
Overhead
61,000
Avail. for mfg.
159,100
Cost of goods mfg
146,300
End. Inv.
12,800
Finished Goods Inventory
Begin. Inv.
21,400
Cost of goods mfg
146,300...
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Complete the cost of goods manufactured schedule for Monty
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MONTY COMPANY
Cost of Goods Manufactured Schedule
For the Month Ended December 31, 2017December 31, 2017For the Year
Ended December 31, 2017
Work in process (1/1)
$213,900
Direct materials
Raw materials inventory (1/1)
$
Add: Raw materials purchases
164,300
Total raw...
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P2-1A. Schedule of Cost of Goods Manufactured and
Sold The Following amounts are available for 2019 for
Bourne Manufacturing Company:
Administrative salaries
(non-factory)…………………………………………………………………………………………$70,000
Administrative rent
(non-factory)…………………………………………………………………………………………….35,000
Advertising and promotion
expense………………………………………………………………………………………..41,000
Depreciation-administrative……………………………………………………………………………………………………22,000
Depreciation-factory……………………………………………………………………………………………………………..30,000
Depreciation-selling………………………………………………………………………………………………………………17,000
Direct
labor…………………………………………………………………………………………………………………………..175,000
Factory
rent…………………………………………………………………………………………………………………………18,000
Factory supplies
used………………………………………………………………………………………………………….12,000
Finished goods inventory (January
1)………………………………………………………………………………….57,000
Finished goods Inventory (December
31)…………………………………………………………………………..50,000
Indirect materials
used………………………………………………………………………………………………………14,000
Indirect
labor………………………………………………………………………………………………………………………19,000
Materials inventory (January
1)………………………………………………………………………………………….15,000
Materials inventory (December
31)……………………………………………………………………………………..20,000
Net delivered cost of materials
purchased…………………………………………………………………………….138,000
Other factory
overhead……………………………………………………………………………………………………………26,000
Sales………………………………………………………………………………………………………………………………………845,000
Sales Salaries...
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The following data from the just completed year are taken from
the accounting records of Mason Company:
Sales ..........................................
$524,000
Direct labor cost..................................
$70,000
Raw material purchases............................
$118,000
Selling expenses .................................
$140,000
Administrative expenses ...........................
$63,000
Manufacturing overhead applied to work in process ......
$90,000
Actual manufacturing overhead costs .................
$80,000
Inventories
Beginning of
End of
Year
Year
Raw materials..............
$7,000
$15,000
Work in process............
$10,000
$5,000...
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