1. Information from the records of the Barry Corporation for the month of June 2

Question

1. Information from the records of the Barry Corporation for the month of June 2018 is as follows: Direct labor Factory overhead Purchases of direct materials Sales Selling and administrative expenses $72,000 65,000 94,000 325,000 34,000 June 1 June 30 Direct materials Work in process Finished goods $28,000 12,000 19,000 S32,000 15,000 18,000 Required a. Calculate cost of goods manufactured for the month of June. b. Calculate cost of goods sold for the month of June. c. Prepare an absorption costing income statement for the month of June. d. Calculate prime costs for the month of June. e. Calculate the conversion costs for the month of June

Explanation / Answer

a) Calculate cost of goods manufactured :

b) Cost of goods sold = 19000+224000-18000 = 225000

c) Prepare absorption costing income statement :

d) Prime cost = direct material + direct labour = 90000+72000 = 162000

e) Conversion cost = 72000+65000 = 137000

Beginning direct material 28000 Purchase of raw material 94000 Less: Ending direct material -32000 Direct material used 90000 Direct labour 72000 Factory overhead 65000 Total manufacturing cost 227000 Beginning work in process 12000 Less: Ending work in process -15000 Cost of goods manufactured 224000

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