Question

Bledsoe Corporation has provided the following data for the month of November:

Inventories:	Beginning		Ending
Raw materials	$	25,700	$	21,700
Work in process	$	17,700	$	10,700
Finished Goods	$	48,700	$	56,700

Additional information:

Raw materials purchases	$	72,700
Direct labor cost	$	92,700
Manufacturing overhead cost incurred	$	42,770
Indirect materials included in manufacturing overhead cost incurred	$	4,070
Manufacturing overhead cost applied to Work in Process	$	41,700

Any underapplied or overapplied manufacturing overhead is closed out to cost of goods sold.

Required:

Prepare a Schedule of Cost of Goods Manufactured and a Schedule of Cost of Goods Sold.

Answer 1

SCHEDULE OF COST OF GOODS MANUFACTURED

Particular	amount ($)
Beginning Raw material inventory	25700
+Purchases of Raw material	72700
Raw material available for use	98400
(-) ending Raw material inventory	(21700)
Raw material used	76700
Direct labour	92700
Prime cost	169400
+Manufacturing overhead (applied)	41700
Total Manufacturing cost	211100
+Opening work in process	17700
(-) ending work in process	(10700)
Cost of goods manufactured	218100

Manufacturing overhead underapplied = Manufacturing overhead applied - Manufacturing incurred

   = $41700 - $42770

   = ($1070)

SCHEDULE OF COST OF GOODS SOLD

Particular	amount ($)
Cost of goods manufactured	218100
+Beginning finished goods	48700
Cost of goods available for sale	266800
(-) ending finished goods	(56700)
+Manufacturing overhead underapplied	1070
Cost of goods sold	$211170

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