Question

The following cost data relate to the manufacturing activities of Black Company during the just completed year: Manufacturing overhead costs incurred: Property taxes, factory $ 2,900 Utilities, factory 4,900 Indirect labor 10,000 Depreciation, factory 23,900 Insurance, factory 5,800 Total actual manufacturing overhead costs $ 47,500 Other costs incurred: Purchases of raw materials $ 31,900 Direct labor cost $ 40,400 Inventories: Raw materials, beginning $ 8,700 Raw materials, ending $ 6,700 Work in process, beginning $ 5,700 Work in process, ending $ 7,900

Overapplied

overhead cost

$4,500

  

Black Company Schedule of Cost of Goods Manufactured Direct materials: Raw materials inventory, beginning $8,700 Add: Purchase of raw materials 31,900 Raw materials available for use 40,600 Deduct: Raw materials inventory, ending 6,700 Raw materials used in production $33,900 Direct labor 40,400 Manufacturing overhead cost applied to work in process im missing this Total manufacturing cost 74,300 Add: Work in process, beginning 5,700 Deduct: Work in process, ending (7,900) Cost of goods manufactured (idk how to calulate this)

     

Answer 1

	BLACK COMPANY
	SCHEDULE OF GOODS MFG
	Direct Materials
	Beginning Raw Materials Inventory	$    8,700
	Add: Purchases of raw materials	$ 31,900
	Raw Material available for use	$ 40,600
	Deduct: Ending Raw Materials Inventory	$ (6,700)
	Direct Materials used in production		$           33,900
	Direct Labor		$           40,400
	Manufacturing Overhead Cost Applied		$           52,000		actual+ overapplied	(47500+4500)
	Total Manufacturing costs		$        126,300
	Add: Beginning WIP Inventory		$             5,700
	Deduct: Ending WIP Inventory		$           (7,900)
	Cost of Goods Manufactured for the Year		$        124,100
	As you have asked for Manufacturing overhead applied to WIP , I have provided you the calculation below
	Calculation of Manufacturing Overhead Cost Applied to WIP
	Direct Materials used in production		$           33,900
	Direct Labor		$           40,400
	Manufacturing Overhead Applied		$           52,000		actual+ overapplied	(47500+4500)
	Total Manufacturing cost		$        126,300
	Proportion of manufacturing overhead applied to manufacturing cost	=	52000/126300
		=	0.411718131
		=	0.41	approx
	ending WIP inventory		$             7,900
	Manufacturing Overhead Cost Applied to WIP	=	7900*0.41
		=	$             3,239

Cost of goods manufactured also known as COGM is very helpful to check where the money is distributed at the manufacturing process of any business. The cost of goods manufactured can be found out by:

Cost of Goods manufactured = Direct materials cost + Direct labor cost + Factory overhead cost + Opening work in process inventory - Ending work in process inventory

By simplifying the above formula we can say cost of goods manufactured is basically:

Cost of Goods Manufactured (COGM) = Total Factory Cost + Opening Work in Process Inventory - Ending Work in Process Inventory