Answer:
Answer:
Cost of goods sold Answer 604,500
Explanation:
Bourne Manufacturing Company
<em>Schedule of Cost of Goods Manufactured and Sold</em>
<u>For the Year Ended December 31,2016</u>
Direct material:
Beginning materials inventory Answer (January 1) 19,500
Net delivered cost of materials purchased 207,000
Cost of material available Answer : 226500
Less: Materials inventory (December 31) 30,000
Total materials used Answer 196500
Less: Indirect material used 21,000
Direct material used Answer 175,500
Direct labor Answer 262500
Manufacturing overhead
Other Factory Overhead 39000
Indirect material Answer 21000
Indirect labor Answer 28500
Factory supplies used Answer 18000
Factory depreciation Answer 45000
Factory rent Answer 27000
<em><u>Total manufacturing overhead Answer 178500</u></em>
Total manufacturing costs for the year Answer 616500
Add: Work in process inventory (January 1) 27,000
Total cost of work in process during the year 643,500
Less: Work in process inventory ( December 31) 46,500
Cost of goods manufactured 597000
Add: Finished goods inventory (January 1) 85,500
Cost of goods available for sale Answer 682,500
Less: Finished goods inventory (December 31) 78,000
<em><u>Cost of goods sold Answer 604,500</u></em>
We add and subtract the amounts according to the schedule.
In this schedule the indirect material is deducted from the direct materials inventory and added to the factory overhead because it is not treated as a direct expense rather it is an indirect expense.
The following are not related to the cost of manufacturing of products and are excluded from the CGS.
Administrative salaries (non-factory) $105,000
Administrative rent (non-factory) 52,500
Advertising and promotion expense 61,500
Depreciation-administrative 33,000
Depreciation-selling 25,500
Sales 1,267,500
Sales salaries expense 108,000
These are included in the net income statement.
