Question

Question 3: Excellence Ltd. has the below inventory balances and other information at the end of Dec 2019. Balances Beginning Ending Direct Material Working in Process Inventory Finished Goods Inventory $ $ 17 750 00 2,850.00 4,200.00 $ $ $ 8,000.00 3,500.00 3800.00 $ Other information Purchase of Direct Material Factory Supervisor Salarios Sales Salaries and Commissions Delivery Cost Sales Revenue Factory Utility Costs Factory Rent Direct Labor $ 60,000.00 $ 5750.00 $ 7,250.00 $ 140000 $ 115,000.00 $ 1,200.00 $ 17,750.00 $ 28,000.00 Required: Please calculate the amount of cost of goods manufactured.

Answer 1

ANSWER: COST OF GOODS MANUFACTURED =121800

SCHEDULE OF COST OF GOODS MANUFACTURED FOR DECEMBER 2019

DIRECT MATERIALS

Beginning raw material 17750

(+) Purchases 60000

(-)Ending raw materials 8000

Direct material used in production   69750

DIRECT LABOR 28000

MANUFACTURING OVERHEAD 24700

TOTAL MANUFACTURING COST 122450

(+) Beginning work in progress 2850

(-) Ending work in progress 3500

COST OF GOODS MANUFACTURED FOR THE YEAR 121800

calculation of manufacturing overhead

Factory supervisor salary +Factory utility cost +factory rent =5750+1200+17550

=24700

If we add beginning of finshed inventory and deduct ending of finished inventory we will get cost of goods sold

COST OF GOODS SOLD

COST OF GOODS MANUFACTURED 121800

(+)BEGINNING FINISHED INVENTORY 4200

(-)ENDING INVENTORY 3800

COST OF GOODS SOLD 122200