4)
how do you calculate cost of good sold could you also explain
it.
Solution 1:
Computation of production cost incurred in april and total cost assigned to each job | ||||
Particulars | Job 306 | Job 307 | Job 308 | Total |
From March: | ||||
Direct material | $29,000.00 | $35,000.00 | $0.00 | $64,000.00 |
Direct labor | $20,000.00 | $18,000.00 | $0.00 | $38,000.00 |
Applied overhead (50% of direct labor) | $10,000.00 | $9,000.00 | $0.00 | $19,000.00 |
Beginning Goods in Process | $59,000.00 | $62,000.00 | $0.00 | $121,000.00 |
For April: | ||||
Direct material | $135,000.00 | $220,000.00 | $100,000.00 | $455,000.00 |
Direct labor | $85,000.00 | $150,000.00 | $105,000.00 | $340,000.00 |
Applied overhead (50% of direct labor) | $42,500.00 | $75,000.00 | $52,500.00 | $170,000.00 |
Total Cost added in April | $262,500.00 | $445,000.00 | $257,500.00 | $965,000.00 |
Total Costs (April 30) | $321,500.00 | $507,000.00 | $257,500.00 | $1,086,000.00 |
Status on April 30 | Finished (Sold) | Finished (Unsold) | In Process | |
April 30 cost included in | Cost of goods sold | Finished goods inventory | Work In Process Inventory |
Solution 2:
Journal Entries - Marcelino Co | |||
Event | Particulars | Debit | Credit |
a | Raw material inventory Dr | $500,000.00 | |
To Accounts Payable | $500,000.00 | ||
(To record purchase of raw material) | |||
b | Work In Process Dr | $455,000.00 | |
To Raw material inventory | $455,000.00 | ||
(To record raw material used in production) | |||
c | Work In Process Dr | $340,000.00 | |
To Cash | $340,000.00 | ||
(To record direct labor payment and assigment to production) | |||
d | Factory overhead Dr | $23,000.00 | |
To Cash | $23,000.00 | ||
(To record Indirect labor payment and assigment to factory overhead) | |||
e | Work In Process Dr | $170,000.00 | |
To Factory Overhead | $170,000.00 | ||
(To apply overhead to production) | |||
f1 | Factory Overhead Dr | $50,000.00 | |
To Raw material inventory | $50,000.00 | ||
(To record indirect material used) | |||
f2 | Factory Overhead Dr | $32,000.00 | |
To Cash | $32,000.00 | ||
(To record factory rent) | |||
f3 | Factory Overhead Dr | $19,000.00 | |
To Cash | $19,000.00 | ||
(To record factory utilities) | |||
f4 | Factory Overhead Dr | $51,000.00 | |
To Accumulated Depreciation | $51,000.00 | ||
(To record factory depreciation) | |||
g | Finished goods inventory Dr | $828,500.00 | |
To Work In Process | $828,500.00 | ||
(Being completed jobs transferred to finished goods) | |||
h | Cost of goods sold Dr | $321,500.00 | |
To Finished goods inventory | $321,500.00 | ||
(To record cost of goods sold for Job 306) | |||
i | Cash Dr | $635,000.00 | |
To Sales Revenue | $635,000.00 | ||
(To record sales of Job 306) | |||
j | Cost of goods sold Dr | $5,000.00 | |
To Factory Overhead | $5,000.00 | ||
(To close underapplied overhead to COGS) |
Solution 3:
Marcelino company | |
Schedule of cost of goods manufactured | |
For the month ended April 30 | |
Particulars | Amount |
Direct material | $455,000.00 |
Direct labor | $340,000.00 |
Applied overhead (50% of DL Cost) | $170,000.00 |
Total manufacturing costs | $965,000.00 |
Add: Beginning WIP | $121,000.00 |
Total cost of work in process | $1,086,000.00 |
Less: Ending WIP | $257,500.00 |
Cost of goods manufactured | $828,500.00 |
Solution 4a:
Adjusted cost of goods sold = Unadjusted cost of goods sold +
Underapplied overhead
= $321,500 + $5,000 = $326,500
Gross profit = Sales Revenue - Cost of goods sold
=$635,000 - $326,500 = $308,500
Solution 4b:
Inventories - April 30 | |
Particulars | Amount |
Raw material inventory ($87,000 + $520,000 - $452,000 - $51,000) | $104,000.00 |
Work In Process Inventory | $257,500.00 |
Finished goods inventory | $507,000.00 |
Total | $868,500.00 |
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