Question

Cornelius Company produces women's clothing. During the year, the company incurred the following costs: Factory rent Direct labor Utilities-factory Purchases of direct materials Indirect materials Indirect labor $ 408,500 357,000 45,600 602,500 82,150 71,400 Inventories for the year were as follows: Materials Work-in-Process Finished Goods January 1 $ 34,500 49,750 154,000 December 31 $ 54,250 43,800 85,450 Required: 1&2. Prepare a statement of cost of goods manufactured and calculate cost of goods sold.

Answer 1

Cornelius Company
Statement of cost of goods manufactured
For the Year Ended December 31
Direct Materials:
Beginning inventory	$ 34,500
Purchase of raw materials	$ 602,500
Materials available	$ 637,000
Ending inventory	($ 54,250)
Materials used		$ 582,750
Direct labor		$ 357,000
Factory overhead:
Factory rent	$ 408,500
Utilities-factory	$ 45,600
Indirect labor	$ 71,400
Indirect materials	$ 82,150
Total factory overhead		$ 607,650
Total Manufacturing cost		$ 1,547,400
Add: Beginning WIP Inventory		$ 49,750
Total manufacturing costs to account for		$ 1,597,150
Deduct: Ending WIP inventory		($ 43,800)
Cost of goods manufactured		$ 1,553,350
Cost of goods sold:
Cost of goods manufactured		$ 1,553,350
Add: Finished goods inventory, beginning		$ 154,000
Cost of goods available for sale		$ 1,707,350
Less: Finished goods inventory, ending		($ 85,450)
Cost of goods sold		$ 1,621,900