Answer and Explanation:
a. The preparation of the cost of goods manufactured statement is as follows:
Opening work in process $119,760
Direct Material
Opening inventory $178,750
Add: Material Purchased $343,200
Cost of Materials Available $521,950
Less: Ending Inventory -$151,940
Cost of Direct Materials Used $370,010
Direct Labor $321,750
Factory Overhead:
Indirect Labor $34,320
Machinery Depreciation $20,740
Heat, Light and Power $7,150
Supplies $5,720
Property Taxes $5,010
Miscellaneous Costs $9,300
Total Factory Overhead $82,240
Total Manufacturing Costs Incurred $774,000
Total Manufacturing Costs $893,760
Less: Ending Work in Process $101,800
Cost of Goods Manufactured $791,960
b. Now the cost of goods sold is
Cost of Goods Sold= Cost of Goods Manufactured + Beginning Finished Goods - Ending Finished Goods
= $791,960 + $91,160 - $103,320
= $779,800
