Question

I have a similar assignment (Compute the cost of goods transferred from production to finished goods, and compute the cost of goods sold). What would be my first step and then next, next ect. The course is Managerial Accounting

Jordan Company's inventory records indicate the following information:

Jordan Company Inventories (as of May 31)

Inventory

Beginning Inventory ($)

Ending Inventory ($)

Raw materials

72,000

110,000

Goods in process

156,000

250,000

Finished goods

160,000

198,000

Production activities for May (in $)

Raw materials (credit purchases)

200,000

Company payroll cost (cash)

400,000

Miscellaneous overhead cost (other accounts credited)

170,500

Materials

Direct

120,000

Indirect

42,000

Labor

Direct

350,000

Indirect

50,000

Overhead rate as a percent of direct labor

75%

Sales on credit

1,000,000

Compute the cost of goods transferred from production to finished goods,

and compute the cost of goods sold.

Cost of Goods Transferred and Cost of Goods Sold

Answer 1

Compute the cost of goods transferred and cost of goods sold: Amt 4 Amt $120,000 $350,000 $ 470.000 $ 42,000 $ 50.000 Particulars Cost of direct labor raw materials consumed Add: Direct labor Prime cost Add:Indirect Expenses: Indirect material used Indirect labor cost Overheads (Direct labor*75%) (350000x75%) Total cost of goods manufactured Add: Beginning work in process Less: Ending work in process Cost of goods transferred Add: Beginning Finished goods Less: Ending finished goods Cost of goods sold $262.500 $ 824,500 $ 156,000 $250.000 $ 730,500 $ 160,000 $198.000 17 S692,500 Therefore, the cost of goods transferred to finished goods is $730,500. The cost of goods sold is $692,500. Working

Amt Amt 120000 350000 =C4+CS 42000 50000 la Particulars Cost of direct labor raw materials consumed Add: Direct labor Prime cost Add:Indirect Expenses: Indirect material used Indirect labor cost Overheads (Direct labor*75%) (350000x75%) Total cost of goods manufactured Add: Beginning work in process Less: Ending work in process Cost of goods transferred Add: Beginning Finished goods Less: Ending finished goods Cost of goods sold =350000*75% =C8+C9+C10+D6 156000 250000 =D11+C12-C13 160000 198000 D14 C15 C16.

Notes: Do not take other expenses mentioned in the question requirement as direct material consumed and all are directly given in the down part of the question. Therefore, please follow the steps mentioned in the answer.