Question

Rocket Company produces small gasoline-powered engines for model airplanes. Mr. Clemens, Rocket’s CFO, has presented you with the following cost information:

	Direct Materials Inventory, beginning		$	80,000
	Direct Materials Inventory, ending		$	122,000
	Work in Process Inventory, beginning		$	140,000
	Work in Process Inventory, ending		$	95,000
	Direct labor		$	780,000
	Direct materials purchases		$	940,000
	Insurance, factory		$	50,000
	Depreciation, factory		$	22,000
	Depreciation, executive offices		$	15,000
	Indirect labor		$	220,000
	Utilities, factory		$	17,000
	Utilities, executive offices		$	8,000
	Property taxes, factory		$	18,000
	Property taxes, executive offices		$	14,000

Using this cost information, prepare a cost of goods manufactured schedule for Mr. Clemens.

Answer 1

		Cost of goods manufactured Schedule
		Particulars			Amount ($)
		Direct materials
		Direct Materials Inventory, beginning		80,000
		Add : Direct materials purchases		940,000
		Less : Direct Materials Inventory, ending		122,000
		Direct materials used in production			898,000
		Direct labor			780,000
		Manufacturing overhead
		Insurance, factory		50,000
		Depreciation, factory		22,000
		Indirect labor		220,000
		Utilities, factory		17,000
		Property taxes, factory		18,000
		Total manufacturing overhead			327,000
		Total manufacturing costs			2,005,000
		Add : Work in Process Inventory, beginning			140,000
		Less : Work in Process Inventory, ending			95,000
		Cost of goods manufactured			2,050,000