Question

The following information is available for Adams Company for 2018 (all numbers in dollars):
	Beginning Finished Goods		306,390
	Beginning Materials		186,319
	Beginning WIP		174,300
	Direct Labor		489,511
	Ending Finished Goods		311,446
	Ending Materials		177,433
	Ending WIP		181,216
	Manufacturing Overhead		?
	Purchases (materials)		741,359
	Sales		3,521,000
	Note: gross profit is 40% of sales
Required: Prepare a statement of cost of goods sold and a statement of cost of goods
	manufactured for 2018

Answer 1

Adams Company
Statement of cost of goods manufactured
Beginning Material Inventory	$186,319
Purchases Materials	$741,359
Total direct materials available	$927,678
Less: Ending Material Inventory	-$177,433
Total raw materials used in the production	$750,245
Direct Labor	$489,511
Manufacturing overhead (Balance Fig.)	$884,816
Total manufacturing costs	$2,124,572
Add: beginning work in process	$174,300
Total cost of work in process	$2,298,872
Less: ending work in process	-$181,216
Cost of goods manufactured	$2,117,656
Adams Company
Statement of the cost of goods sold
Cost of goods manufactured (bal. fig.)	$2,117,656
Beginning finished goods inventory	$306,390
Finished goods available	$2,424,046
Ending finished goods inventory	-$311,446
Cost of goods sold	$2,112,600
Working
Sales	$3,521,000
Gross Profit (40%)	$1,408,400
Cost of goods sold	$2,112,600