Question

Problem 1: The following selected information is provided about a manufacturing company: 7301000-745000 Raw material purchases Direct labor Overhead applied Actual overhead Selling and administrative salaries Other selling and administrative expenses Sales revenue 800,000 415,000 730,000 745,000 500,000 185,000 5,000,000 Inventory data: Raw material Work in process Finished goods January 1 75,000 105,000 120,000 December 31 100,000 140,000 125,000 Calculate the cost of goods sold. Assume that under/over applied overhead is closed directly to cost of goods sold. AND in us

Answer 1

	Cost of Goods Sold =	$ 18,95,000
	Workings:
	Schedule of Cost of goods Manufactured
	Direct Materials
	Raw Material Inventory beginning	$       75,000
Add:	Purchases of raw Material	$   8,00,000
	Total Raw Material available	$   8,75,000
Less:	Raw Material Inventory ending	$   1,00,000
	Raw Material used in production		$   7,75,000
	Direct Labour		$   4,15,000
	Manufacturing overhead		$   7,30,000
	Total manufacturing cost		$ 19,20,000
Add:	Beginning work in process inventory		$   1,05,000
			$ 20,25,000
Less:	Ending work in process inventory		$   1,40,000
	Cost of goods manufactured		$ 18,85,000
	Schedule of Cost of Goods Sold
	Finished Goods Inventory Beginning	$   1,20,000
Add:	Cost of goods manufactured	$ 18,85,000
	Cost of goods available for sale	$ 20,05,000
Less:	Finished Goods Inventory Ending	$   1,25,000
	Unadjusted cost of goods sold	$ 18,80,000
Add:	Underapplied Overheads	$       15,000
	Adjusted cost of goods sold	$ 18,95,000