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