Question

Now calculate the cost of goods sold. Crystal Bay Company Schedule of Cost of Goods Sold Cost of goods sold

Answer 1

First we have to calculate cost of goods manufactured

Raw material inventory, Beginning	$   28,000
Add: Purchase of raw material	$   84,000
Less: Raw material inventory, Ending	$   32,000
Direct material used		$     80,000
Add: Direct labor		$     84,000
Add: Manufacturing overhead
Indirect labor	$   18,000
Insurance on plant	$   13,500
Depreciation - Plant building and Equipment	$   14,000
Repairs and maintenance - Plant	$     7,500
Total manufacturing overhead		$     53,000
Total manufacturing cost		$   217,000
Add: Work in process inventory, Beginning		$     50,000
Less: Work in process inventory, Ending		$     44,000
Cost of goods manufacured		$   223,000

Crystal Bay Company
Schedule of Cost of Goods sold
Finished Goods Inventory, Beginning	$     24,000
Add: Cost of goods manufactured	$   223,000
Cost of goods available for sale	$   247,000
Less: Finished Goods Inventory, Ending	$     31,000
Cost of goods sold	$   216,000

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