Question

TV The following information is for the Forte Company for November Inventories Raw Material Beginning $17,400 31,150 19,200 Work in Process Finished Goods Ending $13,200 28,975 25,500 Direct Labor (21,000 DLH @ $13) Raw Material Purchases $120,000 Insurance-Office 2,570 Indirect Labor 11,200 Office Supplies Expense 900 Factory Supplies Used 350 Insurance Factory 1,770 Other Expenses: Depr. Office Equipment 3,500 Depr.-Factory Equipment17,300 Repair/Maintenance-Factory 7,400 Calculate total manufacturing costs, cost of goods manufactured, and cost of goods sold.

Answer 1

Total manufacturing costs           [Refer working note 1]	$435,220
Cost of goods manufactured        [Refer working note 2]	$437,395
Cost of goods sold                       [Refer working note 3]	$431,095

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Working note 1 - Total manufacturing cost
Direct materials:
Beginning raw materials inventory	$17,400
Add: Raw material purchases	$120,000
Raw materials available for use                  [$17,400 + $120,000]	$137,400
Less: Ending raw materials inventory	$13,200
Raw materials used in production                    [$137,400 - $13,200]		$124,200
Direct labor                                                         [21,000 direct labor hours x $13 per hour]		$273,000
Manufacturing overhead:
Indirect labor	$11,200
Factory supplies used	$350
Depreciation on factory equipment	$17,300
Insurance on factory equipment	$1,770
Repairs / maintenance - Factory	$7,400
Total manufacturing overhead		$38,020
Total manufacturing costs          [$124,200 + $273,000 + $38,020]		$435,220

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Working note 2 - Cost of Goods Manufactured
Total manufacturing costs                                         [Refer working note 1]	$435,220
Add: Beginning work in process inventory	$31,150
Total cost of work-in-process                               [$435,220 + $31,150]	$466,370
Less: Ending work in process inventory	$28,975
Cost of goods manufactured                                      [$466,370 - $28,975]	$437,395

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Working note 3 - Cost of Goods Sold
Beginning finished goods inventory	$19,200
Add: Cost of goods manufactured         [Refer workiing note 2]	$437,395
Cost of goods available for sale           [$19,200 + $437,395]	$456,595
Less: Ending finished goods inventory	$25,500
Cost of goods sold                                 [$456,595 - $25,500]	$431,095