Question

Rex Manufacturing had the following data for the quarter ended December 31:

            

                     Office expenses                         $  12,500

                     Office rent                                     20,000

                     Factory maintenance                   25,000

                     Office maintenance                      11,000

Work in process, Jan.1	15,000
Work in processDec.31	40,000
Finished goods, Jan. 1	72,000
Finished goods, Dec. 31	65,000
Direct materials used	120,000
Direct labor	260,000
Factory depreciation	65,000
Factory rent   Sales	30,000                          580,000
Sales Returns	2,000
Advertising expense	52,000
Admin salaries	25,000
Indirect materials	19,000
Indirect labor	33,000

1. Present Rex's Schedule of Cost of goods Sold.

Answer 1

Cost of goods sold = Finished goods, Jan 1 + Cost of goods manufactured - Finished goods, Dec.31

Cost of goods manufactured = Work in process, Jan 1 + Total manufacturing costs - Work in process, Dec.31

Total manufacturing costs = Direct material + Direct labor + Factory overhead

Factory overhead = Indirect material + Indirect labor + Factory maintenance + Factory depreciation + Factory rent

Factory overhead = $19,000 + 33,000 + 25,000 + 65,000 + 30,000 = $172,000

Total manufacturing costs = $120,000 + 260,000 + 172,000 = $552,000

Cost of goods manufactured = $15,000 + 552,000 - 40,000 = $527,000

Cost of goods sold = $72,000 + 527,000 - 65,000 = $534,000

Schedule of Cost of Goods Sold
Beginning finished goods inventory	$72,000
Add: Cost of goods manufactured	527,000
Cost of goods available for sale	599,000
Less: Ending finished goods inventory	65,000
Cost of goods sold	$534,000