Question

1. Templar Company, a manufacturing firm, has supplied the following information from its accounting records for the month of November: Factory supplies used Depreciation on factory building Salary of company controller Factory janitorial costs Marketing and promotion Direct labor cost Purchases of raw materials Finished Goods Inventory, Nov. 1 Finished Goods Inventory. Nov. 30 Work in Process Inventory, Nov. 1 Work in Process Inventory, Nov. 30 Materials Inventory, Nov. 1 Materials Inventory, Nov. 30 $10,000 7,000 20,000 5.000 4.500 12.000 15,000 2.250 3.750 4.200 2.750 3,500 5,100 Required: a. Prepare a Statement of Cost of Goods Manufactured. List each overhead cost separately on a separate line. b. Prepare a Statement of Cost of Goods Sold.

Answer 1

Ans. A	TEMPLAR COMPANY
	Cost of Goods Manufactured Schedule
	For the Month Ended November 30
	Particulars	Amount	Amount
	Beginning Work in process inventory		$4,200
	Manufacturing Costs:
	Direct materials:
	Beginning raw materials inventory	$3,500
	Add: Purchase of raw materials	$15,000
	Raw materials available	$18,500
	Less: Ending raw materials inventory	-$5,100
	Direct materials used (a)		$13,400
	Direct labor (b)		$12,000
	Manufacturing overhead applied
	Factory supplies used	$10,000
	Depreciation on factory building	$7,000
	Factory janitorial costs	$5,000
	Total factory overhead cost ©		$22,000
	Total manufacturing costs   (a+b+c)		$47,400
	Total cost of work in process		$51,600
	Less: Ending Work in process inventory		-$2,750
	Cost of goods manufactured		$48,850
	Total cost of work in process = Beginning work in process inventory + Total manufacturing costs
Ans. B	TEMPLAR COMPANY
	Schedule of Cost of Goods Sold
	For the Month Ended November 30
	Particulars	Amount
	Cost of Goods Manufactured	$48,850
	Add: Beginning finished goods inventory	$2,250
	Cost of goods available for sale	$51,100
	Less: Ending finished goods inventory	-$3,750
	Cost of goods sold	$47,350
	*Salary of company controller, marketing and promotions are the selling general and administrative expenses
	and these expenses are the part of income statement.