Question

You are given the balances below from the records of XZY Ltd company for the month ended December 31, 2017.

Account Balances

Finished Goods Inventory, December 31 $84,000

Factory Supervisory Salaries 12,000

Raw Materials Inventory, December 1 24,000

Work In Process Inventory, December 31 15,000

Sales Salaries Expense 14,000

Factory Depreciation Expense 18,000

Finshed Goods Inventory, December 1 50,000

Raw Material Purchases 100,000

Work In process Inventory, December 1 30,000

Factory Utilities Expense 10,000

Direct Labor 80,000

Raw Material Inventory, December 31 25,000

Main office accountant salary expense 5,000

Indirect Labor 25,000

Required: Compute the following (in $):

1) Raw Material used in Production

2) Total Manufacturing costs

3) Cost of goods manufactured

4) Cost of goods sold

Answer 1

1)

XYZ Limited Company
Cost of Raw materials used in production
For the month ending December 31
	Units
Raw materials inventory, December 1	$         24,000
Raw materials purchases	$      1,00,000
Cost of raw materials available for use	$      1,24,000
Raw materials inventory, December 31	$       (25,000)
Cost of Raw materials used in production	$         99,000

2)

XYZ Limited Company
Total Manufacturing costs
For the month ending December 31
Cost of direct materials placed in production		$     99,000
Direct labor		$     80,000
Prime cost		$ 1,79,000
Factory overhead:
Indirect labor	$         25,000
Factory supervisory salaries	$         12,000
Factrory depreication expense	$         18,000
Factrory utilities expense	$         10,000	$     65,000
Total manuactruring costs		$ 2,44,000

3)

XYZ Limited Company
Cost of goods manufactured
For the month ending December 31
Work in progress inventory, December 1	$         30,000
Total manufacturing costs	$      2,44,000
Total work in progress during the period	$      2,74,000
Work in progress inventory, December 31	$       (15,000)
Cost of goods manufactured	$      2,59,000

4)

XYZ Limited Company
Cost of goods sold
For the month ending December 31
Finished goods inventory, December 1	$         50,000
Cost of goods manufactured	$      2,59,000
Cost of finished goods available for sale	$      3,09,000
Finished goods inventory, December 31	$       (84,000)
Cost of Goods Sold	$      2,25,000

Note:

Sales salary expense and main office salary expenses are sales and admin expenses not part of the cost of goods sold