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Cost of Goods Sold Budget Wilmington Chemical Company uses oil to produce two types of plastic...

Cost of Goods Sold Budget

Wilmington Chemical Company uses oil to produce two types of plastic products, P1 and P2. Wilmington budgeted 26,000 barrels of oil for purchase in June for $67 per barrel. Direct labor budgeted in the chemical process was $209,000 for June. Factory overhead was budgeted $313,600 during June. The inventories on June 1 were estimated to be:

Oil $14,600
P1 9,800
P2 8,400
Work in process 12,100

The desired inventories on June 30 were:

Oil $16,100
P1 9,000
P2 7,900
Work in process 12,500

Use the preceding information to prepare a cost of goods sold budget for June.

Wilmington Chemical Company
Cost of Goods Sold Budget
For the Month Ending June 30
Finished goods inventory, June 1 $
Work in process inventory, June 1 $
Direct materials:
Direct materials inventory, June 1 $
Direct materials purchases
Cost of direct materials available for use $
Less direct materials inventory, June 30
Cost of direct materials placed in production $
Direct labor
Factory overhead
Total manufacturing costs
Total work in process during the period $
Less work in process inventory, June 30
Cost of goods manufactured
Cost of finished goods available for sale $
Less finished goods inventory, June 30
Cost of goods sold $

Solutions

Expert Solution

Cost of Goods Sold Budget
For the Month Ending June 30
Finished goods inventory, June 1 18200 =9800+8400
Work in process inventory, June 1 12100
Direct materials:
Direct materials inventory, June 1 14600
Direct materials purchases 1742000 =26000*67
Cost of direct materials available for use 1756600
Less direct materials inventory, June 30 16100
Cost of direct materials placed in production 1740500
Direct labor 209000
Factory Overhead 313600
Total manufacturing costs 2263100
Total work in process during the period 2275200
Less work in process inventory, June 30 12500
Cost of goods manufactured 2262700
Cost of finished goods available for sale 2280900
Less finished goods inventory, June 30 16900 =9000+7900
Cost of goods sold 2264000

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