Question

Prepare a cost of goods manufactured schedule and partial financial statements.

Answer 1

a. The preparation of a condensed cost of goods manufactured schedule for Lopez Company is as follows:

Cost of Goods Manufactured Schedule:

Beginning work in process          $14,700

Direct materials                           $62,400

Direct labor                                 $50,000

Overhead applied                      $40,000

Ending work in process             ($15,900)

Cost of goods manufactured $151,200

b. The preparation of an income statement for May for Lopez Company is as follows:

Lopez Company

Income Statement

For the month of May 31, 2020

Sales revenue        $215,000

Cost of goods sold (154,300)

Gross profit            $60,700

c. The indication of the balance sheet presentation of the manufacturing inventories at May 31, 2020 is as follows:

Current Assets:

Finished goods     $9,500

Work in process  $15,900

Raw materials        $7,100

What is the cost of goods manufactured?

The cost of goods manufactured is the sum of the costs of direct materials, direct labor, overhead applied added to the beginning work in process less the ending work in process.

Data and Calculations:

1.                         Beginning       Ending

                         inventories  inventories

Finished goods   $12,600       $9,500

Work in process  $14,700      $15,900

Raw materials      $8,200         $7,100

Work in Process

Beginning balance  $14,700

Direct materials,     $62,400

Direct labor            $50,000

Overhead applied $40,000

Finished goods                        $151,200

Ending balance                         $15,900

Finished Goods

Beginning balance  $12,600

Work in Process       151,200

Cost of goods sold               $154,300

Ending balance                         $9,500

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