The following data (in thousands of dollars) have been taken from the accounting
ID: 2442406 • Letter: T
Question
The following data (in thousands of dollars) have been taken from the accounting records of Larsen Corporation for the just completed year.Sales......................................860
Purchases of raw materials............150
Direct labor..............................110
Manufacturing overhead................210
administrative expenses................130
selling expenses..........................180
raw materials inventory, beginning...40
raw materials inventory, ending.......80
Work in process inventory, beginning.20
Work in process inventory, ending....80
Finished goods inventory, beginning..80
Finished goods inventory, ending......150
Required: a. Prepare a Schedule of Cost of Goods Manufactured in good form.
b. Compute the Cost of Goods Sold.
Explanation / Answer
Required: a. Prepare a Schedule of Cost of Goods Manufactured in good form.
Raw materials consumed
Beginning RM Inventory 40,000
Add : Purchases 150,000
Raw materials available 190,000
Less : Ending RM Inventory 80,000
Raw materials used 110,000
Direct labor 110,000
Manufacturing overhead 210,000
Total manufacturing cost 430,000
Add : Beginning WIP Inventory 20,000
450,000
Less : Ending WIP Inventory (80,000)
Cost of goods manufactured 370,000
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b. Compute the Cost of Goods Sold
Beginning Finished goods Inventory 80,000
Add : Cost of goods manufactured 370,000
Total goods available for sale 450,000
Less : Ending Finished goods Inventory (150,000)
Cost of goods sold 300,000
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