Question

The following balances are from the accounts of Crabtree Machining Company: January 1 December 31 (Beginning) (Ending) $ 97,300 $ 109,400 Direct materials inventory Work-in-process inventory Finished goods inventory 109,100 42,400 105,900 44,600 Direct materials purchased during the year amount to $516,800, and the cost of goods sold for the year was $1,875,000 Required Prepare a cost of goods sold statement. CRABTREE MACHINING COMPANY Cost of Goods Sold Statement For the Year Ended December 31 eginning work-in-process inventory Manufacturing costs Direct materials Purchases S 516,800 Materials available S 516,800 Less: Ending inventory 109,400 Direct materials used S 407,400 Total manufacturing costs Total costs of work-in-process 407,400 S 407,400 Cost of goods manufactured S 407,400 Finished goods available for sale S 407,400 Cost of goods sold S 407,400

Answer 1

Solution

Crabtree Machining Company

Cost of goods sold statement:

Crabtree Machining Company
Cost of Goods Sold Statement
For the Year Ended December 31
Beginning Work in Progress Inventory			$109,100
Manufacturing Costs:
Direct Materials used:
Beginning direct materials inventory	$97,300
Add: Purchases	$516,800
Cost of direct materials available	$614,100
Less: Direct materials inventory	($109,400)
Cost of direct materials used		$504,700
Other Manufacturing Costs		$1,369,300
Total manufacturing costs			$1,874,000
Total cost of work in progress			$1,983,100
Less: ending work in progress			($105,900)
Cost of goods manufactured			$1,877,200
Add: Beginning finished goods inventory			$42,400
Finished goods available for sale			$1,919,600
Less: ending finished goods inventory			($44,600)
Cost of goods sold			$1,875,000

The information about missing values is computed by using the cost of goods statement.

The computations are made backwards, using the cost of goods sold amount, the finished goods available for sale is computed.

This amount is used to compute the cost of goods manufactured.

By Adding ending work in progress and deducting beginning work in progress result in total manufacturing costs.

The cost of direct materials used is deducted from total manufacturing costs to arrive at other manufacturing costs.