Business Name Statement of Cost of Goods Manufactured For the Month Ended Januar

Question

Business Name Statement of Cost of Goods Manufactured For the Month Ended January Beginning work in process inventory     Direct Materials:    Materials - Beginning $     5,000.00    Add: Purchases for month of January    Materials Available for use        Deduct: Ending materials $     3,000.00    Materials used in production $     2,000.00 Direct Labor $     6,240.00 Factory Overhead $     2,800.00 Total Manufacturing OH $   14,040.00 Deduct: Ending work in process inv. $     3,000.00 Cost of Goods Manufactured $   11,040.00 Consider using this format: Beginning Work in Process Inventory $                -    Direct Materials: Materials - Beginning $                -    Add: Purchases for month of January              -    Materials Available for Use                    -    Deduct: Ending Materials              -    Materials Used in Production $                -    Direct Labor                    -    Factory Overhead                    -    Total Manufacturing Overhead $                -    Deduct:  Ending Work in Process Inventory                    -    Cost of Goods Manufactured $                -    Business Name Statement of Cost of Goods Manufactured For the Month Ended January Beginning work in process inventory     Direct Materials:    Materials - Beginning $     5,000.00    Add: Purchases for month of January    Materials Available for use        Deduct: Ending materials $     3,000.00    Materials used in production $     2,000.00 Direct Labor $     6,240.00 Factory Overhead $     2,800.00 Total Manufacturing OH $   14,040.00 Deduct: Ending work in process inv. $     3,000.00 Cost of Goods Manufactured $   11,040.00 Consider using this format: Beginning Work in Process Inventory $                -    Direct Materials: Materials - Beginning $                -    Add: Purchases for month of January              -    Materials Available for Use                    -    Deduct: Ending Materials              -    Materials Used in Production $                -    Direct Labor                    -    Factory Overhead                    -    Total Manufacturing Overhead $                -    Deduct:  Ending Work in Process Inventory                    -    Cost of Goods Manufactured $                -   

Explanation / Answer

Explanations:

Formula used are:

Beginning direct materials+purchases = materails available for use.

Materials available for use - ending materials = materials used in production

Total manufacturing overhead = materials+labor+factory overhead

Thus 14040 = materials+6240+2800

or materials = 14040-6240-2800 = 5000

Now let Januray's purchase be "x". Thus beginning direct materails+x-ending materials = 5000

or, 5000+x-3000 = 5000

x = 3000. Thus January's purchase = 3000

Beginning work in process inventory $0.00 Direct materials: Materials - Beginning $5,000.00 Add: Purchases for month of January $3,000.00 Materials available for use $8,000.00 Deduct: Ending materials $3,000.00 Materials used in production $5,000.00 Direct labor $6,240.00 Factory overhead $2,800.00 Total manufacturing overhead $14,040.00 Deduct: Ending work in process inventory $3,000.00 Cost of goods manufactured $11,040.00

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