To determine a product's cost, use the formula below:
in order to produce, we must use the
Value of goods produced equals starting WIP plus direct materials plus direct labor plus allotted manufacturing expenses - ending WIP.
Schedule of Materials for Goods Directly Manufactured:
Beginning raw material inventory $12,000
Add: Purchase of raw material $30,000
Accessible raw materials overall $42,000
Less: Ending raw material inventory $18,000
Raw material used in production $24,000
Less: Indirect material $5,000
$19,000
Direct labor cost $58,000
Manufacturing Overhead applied $87,000
Total expenses for production $164,000
Add: Beginning WIP Inventory $56,000
Total cost of Work in Process $220,000
Less: Ending WIP Inventory $65,000
Cost of Producing the Goods. $155000
Schedule of Cost of Goods Sold
Beginning Finished Goods Inventory $35,000
Add: Cost of Goods manufactured $155,000
Cost of Goods available for sale $190,000
Less: Ending finished goods inventory $42,000
Unadjusted Cost of Goods Sold $148,000
Add: Under applied Overheads $4,000
Cost of Goods Sold [adjusted] $144,000
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