Question

Required information Use the following information for the Exercises below. (The following information applies to the questions displayed below) The following data is provided for Garcon Company and Pepper Company. Beginning finished goods inventory Beginning work in process inventory Beginning raw materials inventory Rental cost on factory equipment Direct labor Ending finished goods inventory Ending work in process inventory Ending raw materials inventory Factory utilities Factory supplies used General and administrative expenses Indirect labor Repairs-Factory equipment Raw materials purchases Selling expenses Sales Cash Factory equipment, net Accounts receivable, net Garcon Company 14,600 15,300 10,000 33,250 20,800 20,150 27,400 7,200 10,050 8,800 28,500 2,400 7,580 43,500 61,600 232,530 34,000 277,500 15,200 Pepper Company $ 18,550 20,550 9.750 23,200 36,200 13,400 16,800 7,400 13,500 4,200 45,000 9,040 1,750 62,500 57,400 325,010 19,700 142,825 21,950 Exercise 14-8 Cost of goods manufactured and cost of goods sold computation LO P1, P2 Required: 1. Complete the table to find the cost of goods manufactured for both Garcon Company and Pepper Company for the year ended < Prev 3 4 5 of 7 !! Next >

Answer 1

1. Calculation of cost of goods manufactured for Garcon company and pepper company.

	Garcon company	Pepper company
Direct materials:
Beginning raw materials inventory	$10,000	$9,750
Raw materials purchased	43,500	62,500
Raw materials available for use	53,500	72,250
Less: Ending raw materials inventory	(7,200)	(7,400)
Direct materials used	$46,300	$64,850
Direct Labour	$20,800	$36,200
Factory overhead:
Rental cost on factory equipment	33,250	23,200
Factory utilities	10,050	13,500
Factory supplies used	8,800	4,200
Indirect labour	2,400	9,040
Repairs on factory equipment	7,580	1,750
Total factory overhead	$62,080	$51,690
Total manufacturing overhead	$129,180	$152,740
Add: beginning work in progress	15,300	20,550
Total cost of work in progress	144,480	173,290
Less: Ending work in progress	(27,400)	(16,800)
Cost of goods manufactured	$117,080	$156,490

2. Calculation of cost of goods sold for Garcon company and pepper company.

	Garcon	Pepper
Beginning finished goods inventory	14,600	18,550
Cost of goods manufactured	117,080	156,490
Cost of goods available for sale	131,680	175,040
Less: Finished goods inventory	(20,150)	(13,400)
Cost of goods sold	$111,530	$161,640

3. Garcon company income statement

Sales	$232,530
Less: Cost of goods sold	($111,530)
Gross profit	$121,000
Operating expenses:
General and administrative expense	($28,500)
Selling expenses	($61,600)
Income before taxes	$30,900

​​​​​​4. Pepper company income statement

Sales	$325,010
Less: cost of goods sold	($161,640)
Gross profit	$163,370
Operating expenses:
General and administrative expense	($45,000)
Selling expenses	($57,400)
Income before taxes	$60,970

5. Partial Balance sheet of Garcon company

Cash		$34,000
Accounts receivable,net		$15,200
Inventories:
Raw materials	$7,200
Work in progress	$27,400
Finished goods	$20,150	$54,750
Total current assets		$103,950

6. Partial Balance sheet of pepper company

Cash		$19,700
Accounts receivable,net		$21,950
Inventories:
Raw materials	$7,400
Work in progress	$16,800
Finished goods	$13,400	$37,600
Total current assets		$79,250

7. Calculation of prime cost

	Garcon company	Pepper company
Direct materials
Beginning Raw materials inventory	$10,000	$9,750
Raw materials purchased	$43,500	$62,500
Raw materials available for use	$53,500	$72,250
Less: Ending raw material inventory	($7,200)	($7,400)
Direct materials used	$46,300	$64,850
Direct Labour	$20,800	$36,200
Total prime cost	$67,100	$101,050

8. Calculation of total conversion costs

	Garcon company	Pepper company
Direct Labour	$20,800	$36,200
Factory overhead:
Rental cost on factory equipment	$33,250	$23,200
Factory utilities	$10,050	$13,500
Factory supplies used	$8,800	$4,200
Indirect labour	$2,400	$9,040
Repairs on factory equipment	$7,580	$1,750
Total factory overhead	$62,080	$51,690
Total conversion costs	$82,880	$87,890

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