Practice Problems Final Exam Spring 2016 Cost of Goods Manufactured Cook, Inc. m

Question

Practice Problems Final Exam Spring 2016

Cost of Goods Manufactured

Cook, Inc. manufactures min IPads. During March, Cooks transactions and accounts

included the following:       

Work in process inventory, March 1st

$8,800

Work in process inventory, March 31st

7,500

Raw materials inventory, March 1st

4,600

Raw materials inventory, March 31st

5,800

Sales

42,000

Direct labor cost

55,000

Manufacturing overhead

49,600

Raw materials purchased

139,900

Finished goods inventory, March 1st

12,300

Finished goods inventory, March 31st

11,600

Instructions

a. How much is the cost of direct materials issued in production during March?

b.   Calculate the cost of goods manufactured.

c. Calculate cost of goods sold.

           

Work in process inventory, March 1st

$8,800

Work in process inventory, March 31st

7,500

Raw materials inventory, March 1st

4,600

Raw materials inventory, March 31st

5,800

Sales

42,000

Direct labor cost

55,000

Manufacturing overhead

49,600

Raw materials purchased

139,900

Finished goods inventory, March 1st

12,300

Finished goods inventory, March 31st

11,600

Explanation / Answer

Solution:

a) Calculation of Cost of Direct Material issued to production during March

Raw materials inventory, March 1st

$4,600

Add: Raw materials purchased during the month

$139,900

Less: Raw materials inventory, March 31st

($5,800)

Cost of Direct Material issued to production

$138,700

b) Calculation of the cost of goods manufactured

Cost of Direct Material Consumed

(as calculated above in part a)

$138,700

Add: Direct labor cost

$55,000

Add: Manufacturing Overheads

$49,600

Gross Manufacturing Cost

$243,300

Add: Work in process inventory, March 1st

$8,800

Less: Work in process inventory, March 31st

($7,500)

Cost of Goods Manufactured

$244,600

c) Calculation of the cost of goods sold

Cost of Goods Manufactured (Refer Part b)

$244,600

Add: Finished goods inventory, March 1st

$12,300

Less: Finished goods inventory, March 31st

($11,600)

Cost of Goods Sold

$245,300

Raw materials inventory, March 1st

$4,600

Add: Raw materials purchased during the month

$139,900

Less: Raw materials inventory, March 31st

($5,800)

Cost of Direct Material issued to production

$138,700

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