Universal Chemical Company uses oil to produce two types of plastic products, P1

Question

Universal Chemical Company uses oil to produce two types of plastic products, P1 and P2. Universal budgeted 23,300 barrels of oil for purchase in April for $74 per barrel. Direct labor budgeted in the chemical process was $189,700 for April. Factory overhead was budgeted $310,400 during April. The inventories on April 1 were estimated to be: Oil $13,300 P1 8,900 P2 7,600 Work in process 11,000 The desired inventories on April 30 were: Oil $14,600 P1 8,200 P2 7,200 Work in process 11,400 Use the preceding information to prepare a cost of goods sold budget for April 2015. Universal Chemical Company Cost of Goods Sold Budget For the Month Ending April 30, 2015 $ $ Direct materials: $ $ $ $ $ $ can write out the numbers you used to find each account

Explanation / Answer

Cost of good sold Budget Oil P1 P2 Total Opening Inventory A 13300 8900 7600 29800 Direct Material B 1724200 Direct labour C 189700 Factory overhead D 310400 Closing Inventory E 14600 8200 7200 -30000 Cost of Good manufactured A+B+C+D-E 2224100 Add: Opening WIP 11000 Less: Closing WIP 11400 Cost of Good Sold $2223700

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