The following data from the just completed year are taken from the accounting re

Question

The following data from the just completed year are taken from the accounting records of Eccles Company:

Prepare a schedule of cost of goods manufactured. Assume all raw materials used in production were direct materials.

       Sales $ 643,000      Direct labor cost $ 90,000      Raw material purchases $ 132,000      Selling expenses $ 100,000      Administrative expenses $ 43,000      Manufacturing overhead applied to work in process $ 210,000      Actual manufacturing overhead costs $ 220,000  

Explanation / Answer

Raw materials inventory, beginning 8,000
Plus raw material purchases 132,000
Equals raw materials available for use 140,000
Minus raw materials inventory, ending (10,000)
Equals raw materials used 130,000
Plus direct labor 90,000
Plus overhead applied 210,000
Equals total manufacturing costs 430,000
Plus work in process inventory, beginning 5,000
Equals total work in process 435,000
Minus work in process inventory, ending (20,000)
Equals cost of goods manufactured 415,000 [I think this is what you are calling COGSM]

Finished goods inventory beginning 70,000
Plus cost of goods manufactured 415,000
Equals cost of goods available for sale 485,000
Minus finished goods inventory, ending (25,000)
Plus underapplied overhead 10,000 [assuming this is written off to COGS]
Equals cost of goods sold 470,000

Actual overhead costs 220,000
Minus overhead applied (210,000)
Equals underapplied overhead 10,000

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.