In: Accounting
| The following data from the Oasis Corporation is below: | ||||
| Sales | $ 640,000 | |||
| Direct Labor Cost | 90,000 | |||
| Raw Material Purchases | 132,000 | |||
| Manufacturing Overhead applied to WIP | 210,000 | |||
| Actual Manufacturing Overhead costs | 220,000 | |||
| Administrative Salaries | 38,000 | |||
| Depreciation Expense - Office | 15,000 | |||
| Marketing Expense | 22,000 | |||
| Rent Expense - Office | 34,000 | |||
| Sales Salaries | 35,000 | |||
| Sales Commissions | 12,000 | |||
| Direct Materials, beginning balance | 8,000 | |||
| Direct Materials, ending balance | 10,000 | |||
| Work in Process, beginning balance | 5,000 | |||
| Work in Process, ending balance | 20,000 | |||
| Finished Goods, beginning balance | 70,000 | |||
| Finished Goods, ending balance | 25,000 | |||
Prepare a schedule of cost of goods sold
Schedule of Cost of goods sold
|
Direct materials: |
|
|
Direct Materials, beginning balance |
8,000 |
|
Add: Purchases of raw material |
132,000 |
|
Total raw materials available |
140,000 |
|
Direct Materials, ending balance |
- 10,000 |
|
Raw materials used in production |
130,000 |
|
Direct labor |
90,000 |
|
Manufacturing overhead applied to work in process |
210,000 |
|
Total manufacturing cost |
430,000 |
|
Add: Beginning work in process inventory |
5,000 |
|
Less: Ending work in process inventory |
- 20,000 |
|
Cost of goods manufactured |
415,000 |
| Finished Goods, beginning balance | 70,000 |
| Cost of goods available for sale | 485,000 |
| Finished Goods, ending balance | - 25,000 |
| Unadjusted cost of goods sold | 460,000 |
| Under applied Manufacturing Overhead | 10,000 |
| Adjusted cost of goods sold | 470,000 |
Manufacturing Overhead applied to WIP = $210,000
Actual Manufacturing Overhead costs = $220,000
Under applied Manufacturing Overhead = Actual Manufacturing Overhead costs - Manufacturing Overhead applied to WIP
= 220,000 - 210,000
= $10,000