Problem 23.2A Short Budgeting Problem L.O. 4, 5 Harmony Corporation manufactures

Question

Problem 23.2A Short Budgeting Problem L.O. 4, 5

Harmony Corporation manufactures and sells a single product. In preparing the budget for the first quarter, the company's cost accountant has assembled the following information:

The company uses the first-in, first-out method of pricing its inventory of finished goods.

Compute the cost of finished goods manufactured. (Omit the "$" sign in your response.)

Compute the finished goods inventory, March 31 (Remember to use the first-in, first-out method in pricing the inventory.) (Omit the "$" sign in your response.)

Compute the cost of goods sold. (Omit the "$" sign in your response.)

Harmony Corporation manufactures and sells a single product. In preparing the budget for the first quarter, the company's cost accountant has assembled the following information:

Explanation / Answer

Prime Cost = DirectMaterials Cost+ DirectLabor Cost

Total Factory Cost or Manufacturing Cost = Direct Materials + Direct Labor Cost + Factory Overhead

Conversion Cost = DirectLabor Cost+ FactoryOverhead Cost

Cost ofGoods Manufactured(COGM) = Total Factory Cost + Opening Work in Process Inventory - Ending Work in Process Inventory
Or
Cost ofGoods manufactured= Directmaterials cost+ Directlabor cost+ Factoryoverhead cost+ Opening work in process inventory - Ending work in process inventory

Cost of goods sold (COGS) = Cost ofgoods manufactured+ Opening finished goods inventory - Ending finished goods inventory
Or
Cost of goods sold = Directmaterials cost+ Directlabor cost+ Factoryoverhead cost+ Opening work in process inventory - Ending work in process inventory + Opening finished goods inventory - Ending finished goods inventory

Number of units manufactured = Units sold + Ending Finished Goods units - Opening finished goods units

Perunit costofgoods manufactured= Cost ofgoods manufactured/ Units manufactured

Materials used or consumed = Opening inventory or materials + Net purchases of materials - Ending inventory of materials

Gross profit = Net sales - Cost of goods sold

Operating profit = Gross profit - Operating expenses

Operating or commercial expenses = Selling or marketing expenses + General or administrative expenses

Per unit gross profit = Gross profit / No. of units sold

Per unit net profit = Net profit / No. of units sold

Percentage of GP to sales = (Gross profit / Net sales)

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