Question

The following data from the just-completed year are taken from the accounting records of Eccles Company: Sales Direct labour cost Raw material purchases Selling expenses Administrative expenses Manufacturing overhead applied to work in process Actual manufacturing overhead costs $ 720,000 101,000 143,000 111,000 54,000 221,000 242,000 Inventories: Raw materials Work in process Finished goods Beginning of Year $ 9, 100 6,100 71,100 End of Year $11,100 21,100 26,100 Required: 1. Prepare a schedule of cost of goods manufactured. Assume all raw materials used in production were direct materials. ECCLES COMPANY Schedule of Cost of Goods Manufactured Direct materials: Raw materials used in production Total manufacturing cost Cost of goods manufactured

Answer 1

Solution

ECCLES COMPANY
Schedule of Cost of Goods Manufactured
Direct Material
Raw material Inventory Beginning	$          9,100.00
Raw material Purchased	$    143,000.00
Raw material available for use	$    152,100.00
Less: Raw material Inventory Ending	$        11,100.00
Direct Material Used		$     141,000.00
Direct labor		$     101,000.00
Total Manufacturing overheads applied		$     221,000.00
Total manufacturing Cost During the month		$     463,000.00
Add: Work in process Beginning		$           6,100.00
Total Work in Process		$     469,100.00
Less: Work in progress Ending		$         21,100.00
Cost of Goods Manufactured		$     448,000.00

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ECCLES COMPANY
Schedule of cost of goods sold
Beginning Finished Goods Inventory		$         71,100.00
Add: Cost of goods manufactured		$     448,000.00
Goods Available for sale		$     519,100.00
Less :Ending Finished goods Inventory		$         26,100.00
Unadjusted Cost of Goods Sold		$     493,000.00
Underapplied Manufacturing overheads		$         21,000.00
Adjusted cost of goods sold		$     514,000.00

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ECCLES COMPANY
Income statement
Sales revenue		$     720,000.00
Less: Cost of goods sold		$     514,000.00
Gross profit		$     206,000.00
Selling and administrative expenses
Selling expenses	$    111,000.00
Administrative expenses'	$        54,000.00	$     165,000.00
Net income		$         41,000.00