Compute the Cost of Goods Manufactured and Cost of Goods Sold for Strike MarineS

Question

Compute the Cost of Goods Manufactured and Cost of Goods Sold for Strike MarineStrike Marine Company for the most recent year using the amounts described next. Assume that Raw Materials Inventory contains only direct materials.

Beginning End of End of Year $ 9,500 of Year esra Raw materials inventory . $ 22,000 $ 34,000 Insurance on plant Work in process inventory ...$41,000 $ 27,000 Depreciation-plant building and equipment $12,600 Finished goods inventory....$13,000 $ 21,000 Repairs and maintenance-plant .. . . . . .. . . . . $3,900 Purchases of direct materials. Direct labor $ 88,000 General and administrative expenses .. . . $ 42,000 $ 24,500

Explanation / Answer

Raw Material Opening inventory 22000 Add: Purchases 74000 Less: Raw Material Ending inventory 34000 Raw material used 62000 Add: Direct labor 88000 Add: Indirect labor 42000 Add: Insurance on plant 9500 Add: Depreciation on plant 12600 Add: Plant repair 3900 Add: Work in process opening inventory 41000 Less: Work in process ending inventory 27000 Cost of goods manufactured 232000 Add: Finished goods opening inventory 13000 Less: Finished goods ending inventory 21000 Cost of goods sold 224000

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