Computing Cost of Manufactured and Sold Goods Compute the cost of goods manufact
ID: 2624607 • Letter: C
Question
Computing Cost of Manufactured and Sold Goods
Compute the cost of goods manufactured and cost of goods sold for Strike Marine Company for the most recent year using the amounts described below. Assume that raw materials inventory contains only direct materials.
Beginning of End of End of
Year Year Year
Raw materials inventory
$25,000
$28,000
Insurance on plant
$9,000
Work in process inventory
$50,000
$35,000
Depreciation plant building and equipment
$13,000
Finished goods inventory
$18,000
$25,000
Repairs and maintenance
$4,000
Purchases of direct materials
$78,000
Marketing expenses
$77,000
Direct labor
$82,000
General and administrative expenses
$29,000
Indirect labor
$15,000
Raw materials inventory
$25,000
$28,000
Insurance on plant
$9,000
Work in process inventory
$50,000
$35,000
Depreciation plant building and equipment
$13,000
Finished goods inventory
$18,000
$25,000
Repairs and maintenance
$4,000
Purchases of direct materials
$78,000
Marketing expenses
$77,000
Direct labor
$82,000
General and administrative expenses
$29,000
Indirect labor
$15,000
Explanation / Answer
The schedules of cost of goods manufactured. Direct Material Beginning Raw Material $ 25,000 Plus: Net Purchases of Raw Material $ 78,000 Raw Material Available $ 103,000 Less: Ending Raw Material $ 28,000 Raw Material transferred to production $ 75,000 Direct Labor $ 82,000 Factory Overhead Insurance on Plant $ 9,000 Indirect Labor $ 15,000 Depreciation plant building and equipment $ 13,000 Repairs and maintenance $ 4,000 $ 41,000 Total Manufacturing Cost $ 198,000 Beginning Work in process Inventory $ 50,000 $ 248,000 Less: Ending Work in process Inventory $ 35,000 Cost of Good Manufactured $ 213,000 The schedules of cost of goods sold Beginning Finished Goods Inventory $ 18,000 Plus: Cost of Good Manufactured $ 213,000 Goods Available for sale $ 231,000 Less: Finished Goods Inventory $ 25,000 Cost of Good Sold $ 206,000
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