Question

E14-8 Compute cost of goods manufactured and sola. (LO 5, 6), AP Lopez Corporation incurred the following costs while manufacturing its product. Materials used in product Depreciation on plant Property taxes on store Labor costs of assembly-line workers Factory supplies used $45,000 60,000 Property taxes on plant 14,000 21,000 35,000 23,000 Salaries paid to sales clerks 50,000 $120,000 Advertising expense 7,500 Delivery expense 110,000 Sales commissions Work in process inventory was $12,000 at January 1 and $15,500 at December 31. Finished goods inventory was $60,000 at January 1 and $45,600 at December 31. Instructions (a) Compute cost of goods manufactured (b) Compute cost of goods sold.

Answer 1

Answer:

(a)

Compute cost of goods manufactured

	Amount $	Amount $
Materials used in product		120,000
Labor costs of assembly-line workers		110,000
Factory overheads
...Depreciation on plant	60,000
...Property taxes on plant	14,000
...Factory supplies used	23,000	97,000
Add WIP		12,000
Less: WIP		-15500
Cost of goods manufactured		323,500

(b)

Compute cost of goods sold

Beginning Finished goods	60,000
Cost of goods miff	323,500
Cost of goods available for slate	383,500
less Ending FG	-45600
COST GOODS SOLD	337,900