The following data (in thousands of dollars) have been taken from the accounting

Question

The following data (in thousands of dollars) have been taken from the accounting records of Larklin Corporation for the just completed year.

Sales

$820

Purchases of raw materials

$195

Direct labor

$170

Manufacturing overhead

$250

Administrative expenses

$180

Selling expenses

$140

Raw materials inventory, beginning

$80

Raw materials inventory, ending

$35

Work in process inventory, beginning

$65

Work in process inventory, ending

$30

Finished goods inventory, beginning

$130

Finished goods inventory, ending

$165

Prepare a Schedule of Cost of Goods Manufactured statement .

Sales

$820

Purchases of raw materials

$195

Direct labor

$170

Manufacturing overhead

$250

Administrative expenses

$180

Selling expenses

$140

Raw materials inventory, beginning

$80

Raw materials inventory, ending

$35

Work in process inventory, beginning

$65

Work in process inventory, ending

$30

Finished goods inventory, beginning

$130

Finished goods inventory, ending

$165

Explanation / Answer

The cost of goods manufactured schedule is used to calculate the cost of producing products for a period of time. The cost of goods manufactured amount is transferred to the finished goods inventory account during the period and is used in calculating cost of goods sold on the income statement. The cost of goods manufactured schedule reports the total manufacturing costs for the period that were added to work-in-process, and adjusts these costs for the change in the work-in-process inventory account to calculate the cost of goods manufactured. http://www.cliffsnotes.com/study_guide/The-Cost-of-Goods-Manufactured-Schedule.topicArticleId-21248,articleId-21219.html

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