Question

The following information is from ABC Company’s general ledger: Beginning and ending inventories, respectively, for raw materials were $9,500 and $11,500 and for work in process were $21,500 and $23,500. Raw material purchases and direct labor costs incurred were $37,500 each, and manufacturing overhead applied amounted to $21,500.

Required:

Prepare a statement of cost of goods manufactured for ABC Company. (Amounts to be deducted should be indicated by a minus sign.)

ABC COMPANY
Statement of Cost of Goods Manufactured
Raw materials:
Raw materials available for use	0
Cost of raw materials used		$0
Total manufacturing costs		0
Cost of goods manufactured		$0

Answer 1

Step 1:In managerial accounting and cost accounting, the cost of goods manufactured is calculated as a schedule, statement, or production cost for those products which were completed in an accounting period. In other words, the cost of manufactured goods is linked to manufacturing costs, which are transferred from the manufacturing area to the finished goods during the period.

Step 2:

ABC COMPANY Statement of cost of goods manufactured
Particulars	Amount	Amount
Beginning of inventories	$9,500
Purchases	$37,500
Total Raw Materials Available	$47,000
Less:- Ending of Raw Materials	($11,500)
Total Raw materials Used.		$35,500
Direct Labor	$37,500
Manufacturing Overhead	$21,500
Total Manufacturing Costs		$94,500
Add: Beginning of Work in Process	$21,500
		$116,000
Less: Ending of Work In Process	($23,500)
Cost of Good Manufactured		$92,500