Question

c. Chantilly Lace Company manufactured 200,000 units in 2019 and reported the following costs: Indirect manufacturing labour Supplies Heat, light & electricity Depreciation-plant Depreciation equipment Direct materials, 1/1/19 Finished goods, 1/1/19 Finished goods, 31/12/19 Work-in-process, 1/1/19 Work-in-process, 31/12/19 Leasing costs-plant Direct material purchase Direct materials, 31/12/19 Direct labour $ 270,000.00 $ 67,000.00 S 63,500.00 $ 25,884.00 $ 34,621.00 $ 78,423.00 $ 255,643.00 $ 245,789.00 $ 213,456.00 $ 218,796.00 $ 24,100.00 $ 236,548.00 $ 89,655.00 $ 357,890.00 - Calculate the (i) cost of goods manufactured and (ii) cost of goods sold for 2019. (4 +3+9 - 16 Marks) Page 2 of 9

Answer 1

i)

CHANTILLY LACE COMPANY COST OF GOODS MANUFACTURED FOR THE YEAR ENDED 2019
Direct material ,1/1/19	78423
Direct material purchase	236548
Direct material available for use	314971
Less:Direct material 31/12/19	-89655
Direct material used		225316
Direct labor cost		357890
Factory Overhead
Indirect manufacturing labor	270000
supplies	67000
Heat ,light and electricity	63500
Depreciation ,plant	25884
Depreciation,equipment	34621
Leasing cost-plant	24100
Total Factory overhead		485105
Total manufacturing cost incurred during the year		1068311
Work in process 1/1/19		213456
Total work in process		1281767
less:Work in process 31/12/19		-218796
Total cost of goods manufactured		1062971

ii)

CHANTILLY LACE COMPANY COST OF GOODS sold FOR THE YEAR ENDED 2019
Finished goods inventory 1/1/19	255643
cost of goods manufactured	1062971
Total cost of goods available for sale	1318614
Finished goods inventory 31/12/19	-245789
cost of goods sold	1072825