Question

Cost of Goods Sold Budget Universal Chemical Company uses oil to produce two types of plastic products, P1 and P2. Universal budgeted 31,400 barrels of oil for purchase in April for $69 per barrel. Direct labor budgeted in the chemical process was $260,000 for April. Factory overhead was budgeted $390,000 during April. The inventories on April 1 were estimated to be: Oil $18,200 P1 12,200 10,400 P2 15.100 Work in process The desired inventories on April 30 were: $20,000 Oil 11,200 P1 9,900 P2 15,600 Work in process Use the preceding information to prepare a cost of goods sold budget for April 2017. Universal Chemical Company Cost of Goods Sold Budget For the Month Ending April 30, 2017

Answer 1

UNIVERSAL CHEMICAL COMPANY
COST OF GOODS SOLD BUDGET
FOR THE MONTH ENDING APRIL 30,2017
FINISHED GOODS INVENTORY APRIL-1 (12200+10400)			$        22,600.00
WORK IN PROCESS INVENTORY APRIL -1		$        15,100.00
DIRECT MATERIALS
INVENTORY ARIL 1	$        18,200.00
PURCHASES (31400 x69)	$ 2,166,600.00
COST OF DIRECT MATERIAL AVAILABLE FOR USE	$ 2,184,800.00
LESS: CLOSING INVENTORY APRIL 30	$        20,000.00
COST OF DIRECT MATERIAL PLACED IN PRODUCTION	$ 2,164,800.00
DIRECT LABOR	$      260,000.00
FACTORY OVERHEAD	$      390,000.00
TOTAL MANUFACTURING COST		$ 2,814,800.00
TOTAL WORK IN PROCESS DURING THE PERIOD		$ 2,829,900.00
LESS:WORK IN PROCESS INVENTORY APRIL 30		$        15,600.00
COST OF GOODS MANUFACTURED			$ 2,814,300.00
COST OF GOODS AVAILABLE FOR SALE			$ 2,836,900.00
LESS: FINISHED GOODS INVENTORY APRIL 30 (11200+9900)			$        21,100.00
COST OF GOODS SOLD			$ 2,815,800.00