Question

Computing cost of goods manufactured and cost of goods sold

Use the following information for a manufacturer to compute cost of goods manufactured and cost of goods sold:

Balances: Beginning Ending

Direct Materials \( 27,000 \) 28,000

Work-in-Process Inventory 40,000 32,000

Finished Goods Inventory 18,000 25,000

Other information:

Purchases of direct materials $ 73,000

Direct labor 88,000

Manufacturing overhead 43,000

Short answer

The cost of goods manufactured is $211,000 and the cost of goods sold is $204,000.

Step-by-step solution

Step-by-Step SolutionStep 1 : Computation of cost of goods manufactured

Schedule of cost of goods manufactured
	Amount ($)
Direct materials beginning	$27,000
Add: Purchases	$73,000
	$100,000
Less: Ending Direct Materials	$28,000
Raw Material Used	$72,000
Direct Labor	$88,000
Manufacturing Overhead	$43,000
Total manufacturing costs incurred during the year	$203,000
Add: Opening WIP	$40,000
	$243,000
Less: Ending WIP	$32,000
Cost of goods manufactured	$211,000

 Computation of Cost of goods sold

Schedule of cost of goods sold
	Amount ($)
Cost of goods manufactured	$211,000
Add: Opening finished goods	$18,000
	$229,000
Less: Ending finished goods	$25,000
Cost of goods sold	$204,000