Joseph Co. pulled the following information from its record for fiscal year 2015
ID: 2419420 • Letter: J
Question
Joseph Co. pulled the following information from its record for fiscal year 2015. Manufacturing overhead is allocated at a rate of 120% of Direct Labor cost. (Do not worry about closing Manufacturing overhead.) All information given and asked of you is prior to closing Manufacturing overhead.
Raw Materials Purchases (includes DM and IM)
$82,000
Direct Materials used
$94,000
Indirect Material Used
$5,000
Cost of Goods Manufactured
$204,000
Manufacturing allocated to jobs
$96,000
Cost of Goods Sold
$149,000
Indirect Labor Used
$35,000
Under-allocation of Manufacturing Overhead
$8,000
Additionally, the following general ledger balances were given:
Raw Materials Inventory as of 1/1/2015
$30,000
Work in Process as of 1/1/2015
$10,000
Finished Goods Inventory as of 12/31/2015
$60,000
Compute the following:
D. What is the 1/1/2015 Cost of Goods Sold? ____________
E. Other manufacturing overhead costs incurred during the year besides those listed above? ___________
Raw Materials Purchases (includes DM and IM)
$82,000
Direct Materials used
$94,000
Indirect Material Used
$5,000
Cost of Goods Manufactured
$204,000
Manufacturing allocated to jobs
$96,000
Cost of Goods Sold
$149,000
Indirect Labor Used
$35,000
Under-allocation of Manufacturing Overhead
$8,000
Explanation / Answer
Answed D. Calculation of Cost of goods sold of Joseph Co. as on 1/1/2015 (Amount in $) Cost of Goods Sold (COGS)= Beginning Finished goods Inventory+ Cost of goods manufactured- Closing Inventory of Finished goods Beginning Finished goods Inventory (Working Note 1) -52000 Cost of goods manufactured 204000 Closing Finished goods inventory 60000 Cost Of Goods Sold as on 1/1/2015 92000 Working Note 1- Computation of Beginning Finished goods Inventory Cost of goods sold 30000 Cost of goods manufactured 82000 Beginning Finished goods Inventory= Cost of goods sold- Cost of goods manufactured -52000
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