Question

The following data is provided for Garcon Company and Pepper Company.

	Garcon Company					Pepper Company
Beginning finished goods inventory		$	13,200			$	17,500
Beginning work in process inventory			15,700				21,600
Beginning raw materials inventory (direct materials)			7,400				14,400
Rental cost on factory equipment			31,250				24,550
Direct labor			25,000				36,600
Ending finished goods inventory			21,200				14,300
Ending work in process inventory			22,900				19,000
Ending raw materials inventory			6,100				7,400
Factory utilities			11,550				14,500
Factory supplies used (indirect materials)			12,100				4,300
General and administrative expenses			29,500				50,000
Indirect labor			2,100				8,140
Repairs—Factory equipment			6,740				1,950
Raw materials purchases			42,000				59,000
Selling expenses			54,400				55,000
Sales			207,030				292,510
Cash			23,000				22,700
Factory equipment, net			262,500				133,825
Accounts receivable, net			15,800				24,200

Garcon Company Pepper Company Direct materials Beginning raw materials inventory $13,200 $14,400 Add: Raw materials purchases 42,000 59,000 Raw materials available for use 55,200 73,400 Less: Ending raw materials inventory 6,100 7,400 Direct materials used 49,100 66,000 Direct labor 25,000 36,600 Factory overhead Rental cost on factory equipment 31,250 24,550 Factory utilities 11,550 14,500 Factory supplies used 12,100 4,300 Indirect labor 2,100 8,140 Repairs—Factory equipment 6,740 1,950 Total factory overhead 63,740 53,440 Total manufacturing costs Add: Beginning work in process inventory Total cost of work in process 0 0 Less: Ending work in process inventory Cost of goods manufactured $0 $0

December 31, 2019.

	Garcon Company Pepper Company Beginning finished goods inventory Add: Cost of goods manufactured Cost of goods available for sale Less: Ending finished goods inventory Cost of goods sold $0 $0

Answer 1

Calculate cost of goods manufactured as follows:

	Garcon Company	Pepper Company
Direct materials:
Beginning raw materials inventory	7,400	14,400
Add: Raw materials Purchased	42,000	59,000
Raw materials available for use	49,400	73,400
Less: Ending raw materials inventory	6,100	7,400
Direct materials used (a)	43,300	66,000
Direct labor (b)	25,000	26,600
Factory overhead
Rental cost on factory equipment	31,250	24,550
Factory utilities	11,550	14,500
Factory supplies used	12,100	4,300
Indirect labor	2,100	8,140
Repairs factory equipment	6,740	1,950
Total factory overhead (c)	63,740	53,440
Total Manufacturing cost (a + b + c = d)	132,040	146,040
Add: Beginning work in progress inventory (e)	15,700	21,600
Total cost of work in process (d + e = f)	147,740	167,640
Less: Ending work in progress inventory (g)	22,900	19,000
Cost of goods manufactured (f -g)	$124,840	$148,640

Calculate cost of goods sold as follows:

	Garcon Company	Pepper Company
Beginning finished goods inventory	13200	17500
Add: Cost of goods manufactured	124840	148640
Cost of goods available for sale	138040	166140
Less: Ending finished goods inventory	21200	14300
Cost of goods sold	116840	151840