Required information [The following information applies to the questions display

Question

Required information [The following information applies to the questions displayed below.] Bodin Company manufactures finger splints for kids who get tendonitis from playing video games. The firm had the following inventories at the beginning and end of the month of January Finished goods Work in process Raw material January 1 125,000 233,000 132,000 January 31 117,000 251,000 124,000 The following additional data pertain to January operations Raw material purchased Direct labor Actual manufacturing overhead Actual selling and administrative expenses $190,000 350,000 170,000 115,000 The company applies manufacturing overhead at the rate of 60 percent of direct-labor cost. Any overapplied or underapplied manufacturing overhead is accumulated until the end of the year. 4. Compute the cost of goods sold for January ost of goods sold

Explanation / Answer

4. Cost of goods sold for January: $748,000

Workings:

BODIN COMPANY Cost of Goods Sold For the Month of January Beginning raw materials $ 132000 Add: Raw material purchased 190000 Raw materials available for use 322000 Less: Ending raw materials 124000 Raw materials used 198000 Direct labor 350000 Manufacturing overhead applied ($350000 x 60%) 210000 Total current manufacturing costs 758000 Add: Beginning work in process 233000 Total cost of work in process 991000 Less: Ending work in process 251000 Cost of goods manufactured $ 740000 Add: Beginning finished goods 125000 Cost of goods available for sale 865000 Less: Ending finished goods 117000 Cost of goods sold $ 748000

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