Answer:
Basic Factor, Inc.
Cost of Goods Manufactured statement for the year ended December 31:
Opening Raw Materials Inventory = $88,000
Direct Materials = $180,000
Total cost of raw materials available = $268,000
Less Closing Raw Materials Inventory = $68,000
Cost of raw materials used in production = $200,000
Opening goods in process inventory = $25,000
Cost of raw materials used in production = $200,000
Direct Labour = $88,000
Factory Supplies = $9,500
Total Direct Cost = $322,500
Less closing goods in process inventory = $29,800
Prime Cost = $292,700
add Fixed Factory Cost:
Depreciation of Equipment = $27,000
Factory Rent = $20,000
Factory Utilities = $16,000
Factory Insurance = $17,000
Cost of Manufactured Goods = $372,700
Explanation:
Cost of manufactured goods is the managerial accounting term used to describe the total cost incurred in producing goods. It includes not only the variable costs, but also the fixed costs of production.
A step-by-step method of preparing the statement of Cost of Manufactured Goods (COGM) yields the costs of raw materials available for production, the cost of raw materials used, the total direct cost, and the prime cost.
