Question

Cost of Goods Sold Budget

Delaware Chemical Company uses oil to produce two types of plastic products, P1 and P2. Delaware budgeted 30,500 barrels of oil for purchase in June for $75 per barrel. Direct labor budgeted in the chemical process was $274,500 for June. Factory overhead was budgeted at $411,800 during June. The inventories on June 1 were estimated to be:

Oil	$19,200
P1	12,900
P2	11,000
Work in process	15,900

The desired inventories on June 30 were:

Oil	$21,100
P1	11,800
P2	10,400
Work in process	16,500

Use the preceding information to prepare a cost of goods sold budget for June. For those boxes in which you must enter subtracted or negative numbers use a minus sign.

Delaware Chemical Company
Cost of Goods Sold Budget
For the Month Ending June 30
			$
		$
Direct materials:
	$
	$
	$
		$
			$
			$
			$

Answer 1

Solution

Delaware Chemical Company
Cost of Goods Sold Budget
For the Month Ending June 30
Finished goods inventory, June 1			$ 23,900
Work in process inventory, June 1		$ 15,900
Direct materials:
Direct materials inventory, June 1	$ 19,200
Direct materials purchases	$ 2,287,500
Cost of direct materials available for use	$ 2,306,700
Direct materials inventory, June 30	$ 21,100
Cost of direct materials placed in production	$ 2,285,600
Direct labor	$ 274,500
Factory overhead	$ 411,800
Total manufacturing costs		$ 2,971,900
Total work in process during the period		$ 2,987,800
Work in process inventory, June 30		$ 16,500
Cost of goods manufactured			$ 2,971,300
Cost of finished goods available for sale			$ 2,995,200
Finished goods inventory, June 30			$ 22,200
Cost of goods sold			$ 2,973,000