Question

Cost of Goods Sold Budget

Delaware Chemical Company uses oil to produce two types of plastic products, P1 and P2. Delaware budgeted 30,200 barrels of oil for purchase in June for $65 per barrel. Direct labor budgeted in the chemical process was $235,600 for June. Factory overhead was budgeted at $353,300 during June. The inventories on June 1 were estimated to be:

Oil	$16,500
P1	11,100
P2	9,400
Work in process	13,700

The desired inventories on June 30 were:

Oil	$18,100
P1	10,100
P2	9,000
Work in process	14,100

Use the preceding information to prepare a cost of goods sold budget for June. For those boxes in which you must enter subtracted or negative numbers use a minus sign.

Delaware Chemical Company
Cost of Goods Sold Budget
For the Month Ending June 30
Finished goods inventory, June 1			$
Work in process inventory, June 1		$
Direct materials:
Direct materials inventory, June 1	$
Direct materials purchases
Cost of direct materials available for use	$
Direct materials inventory, June 30
Cost of direct materials placed in production	$
Direct labor
Factory overhead
Total manufacturing costs
Total work in process during the period		$
Work in process inventory, June 30
Cost of goods manufactured
Cost of finished goods available for sale			$
Finished goods inventory, June 30			$
Cost of goods sold			$

Answer 1

Delaware Chemical Company
Cost of Goods Sold Budget
For the Month Ending June 30
Finished goods inventory, June 1			$ 20,500
Work in process inventory, June 1		$ 13,700
Direct materials:
Direct materials inventory, June 1	$ 16,500
Direct materials purchases	$ 1,963,000
Cost of direct materials available for use	$ 1,979,500
Direct materials inventory, June 30	$ 18,100
Cost of direct materials placed in production	$ 1,961,400
Direct labor	$ 235,600
Factory overhead	$ 353,300
Total manufacturing costs		$ 2,550,300
Total work in process during the period		$ 2,564,000
Work in process inventory, June 30		$ 14,100
Cost of goods manufactured			$ 2,549,900
Cost of finished goods available for sale			$ 2,570,400
Finished goods inventory, June 30			$ 19,100
Cost of goods sold			$ 2,551,300