Question

Chapter 2 - Learning Activity 1
1) Eschliman Manufacturing Company had the following account balances for the quarter ending
September 30, unless otherwise noted:
Amortization of manufacturing equipment
Amortization of office equipment
Direct manufacturing labour
$88,000
41,200
160,000-
Direct materials used
126,000
Finished goods inventory (July 1)
Finished goods inventory (September 30)
General office expenses
180,000
170,000
101,800
Indirect manufacturing labour
62,000
Indirect materials used
28,000
Marketing distribution costs
Miscellaneous plant overhead
10,000'
45,000
Plant utilities
30,800
Property taxes on plant building
Property taxes on salespersons' company vehicles
Work-in-process inventory (July 1)
Work-in-process inventory (September 30)
9,600
4,000
46,800
57,000
Required:
a. Prepare a cost of goods manufactured schedule for the quarter.
b. Prepare a cost of goods sold schedule for the quarter.

Answer 1

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Eschliman Manufacturing Company
Answer a
Cost of goods manufactured	Amount $	Amount $
Work in process inventory, July 1		46,800.00
Direct materials used		126,000.00
Direct manufacturing Labor		160,000.00
Manufacturing Overhead
Amortization of manufacturing equipment	88,000.00
Indirect manufacturing labor	62,000.00
Indirect materials used	28,000.00
Miscellaneous plant overhead	45,000.00
Plant utilities	30,800.00
Property taxes on plant building	9,600.00
Total Manufacturing Overhead		263,400.00
Total Manufacturing costs		549,400.00
Total cost of work in process		596,200.00
Less: Work in process inventory, Sep 30		57,000.00
Cost of goods manufactured		539,200.00
Answer b
Cost of goods sold	Amount $	Amount $
Finished goods inventory, July 1	180,000.00
Cost of goods manufactured	539,200.00
Cost of goods available for sale	719,200.00
Less: Finished goods inventory, Sep 30	170,000.00
Cost of goods sold		549,200.00
Note: Office & Marketing expenses are not considered as manufacturing costs.