Question

Glavine Corporation incurred the following costs while manufacturing its product. Materials used in product $125,000 Depreciation on plant 60,000 Property taxes on store 7,500 Labor costs of assembly-line workers 110,000 Factory supplies used 23,000 Advertising expense 45,000 Property taxes on plant 19,000 Delivery expense 21,000 Sales commissions 35,000 Salaries paid to sales clerks 50,000 Work-in-process inventory was $27,000 at January 1 and $15,500 at December 31. Finished goods inventory was $65,000 at January 1 and $50,600 at December 31.(a) Compute cost of goods manufactured.

(b) Compute cost of goods sold.

Answer 1

Answer:

Part (a) Compute cost of goods manufactured.

Direct Materials                                                                          125,000

Direct Labor                                                                                110,000

Prime Cost                                                                                 235,000

Add Manufacturing Overhead Expenses:

Depreciation on Plant                                                                 60,000

Factory Supplies                                                                         23,000

Property Taxes on Plant                                                              19,000

Total Manufacturing Costs                                                       337,000

Add Opening Work In Process Inventory                                  27,000

Less Closing Work In Process Inventory                                  (15,500)

Cost of goods manufactured                                                   348,500

Part (b) Compute cost of goods sold.

Opening Stock of Finished Goods Inventory                            65,000

Add Cost of Goods Manufactured                                           348,500

Less Closing Stock Of Finished Goods Inventory                   (50,600)

Cost of goods sold                                                                    362,900

Explanation:

Part (a) Compute cost of goods manufactured.

Cost of goods manufactured = Direct Materials + Direct Labor + Manufacturing Overheads

IGNORE NON-MANUFACTURING OVERHEADS FOR THIS PART OF CALCULATION !

Part (b) Compute cost of goods sold.

Cost of Goods Sod = Opening Stock of Finished Goods + Cost of Goods Manufactured - Closing Stock of Finished Goods

Answer 2

Answer:

Cost of Goods Sold   $ 362,500

Explanation:

Glavine Corporation

Cost Of Goods Sold Statement

Materials used $125,000

Labor costs of assembly-line workers 110,000  

Factory Overhead  $ 102,000

Factory supplies used 23,000

Depreciation on plant 60,000

Property taxes on plant 19,000

Total Manufacturing Costs  $ 337,000

Add Work-in-process inventory was $27,000 at January 1

Cost of Goods Available for Manufacture $ 364,000

Less Work-in-process inventory   $15,500 at December 31.

Cost of Goods Manufactured $ 348,500

Add Finished goods inventory was $65,000 at January 1

Cost of Goods Available for Sale  $ 413,500

Less Finished goods inventory $50,600 at December 31

Cost of Goods Sold   $ 362,500

These all expenses are related to Sales and included in the income statement. They are not related to the manufacturing of the product.

Advertising expense 45,000

Property taxes on store 7,500 ****

It is considered to be the Sales Store

Delivery expense 21,000

Sales commissions 35,000

Salaries paid to sales clerks 50,000