Question

Skysong, Inc. incurred the following costs while manufacturing its product.
Materials used in product $124,000 Advertising expense $48,600
Depreciation on plant 67,300 Property taxes on plant 18,700
Property taxes on store 7,960 Delivery expense 30,900
Labor costs of assembly-
line workers 119,500 Sales commissions 37,900
Factory supplies used 26,500 Salaries paid to sales
clerks 60,600
Work in process inventory was $13,000 at January 1 and $17,100 at December 31. Finished goods inventory was $69,400 at January 1 and $48,200 at December 31.
1. Compute cost of goods manufactured.
2. Compute cost of goods sold.

Answer 1

Answer:Cost of goods manufactured =    $351,900  

Cost of goods sold   =      $373,100

Explanation:

a)cost of goods manufactured

Material used in product                               $124,000

Labor costs of assembly line workers          $119,500

Add:

Factory Overhead:

Depreciation on plant                                   $67,300  

Property taxes on plant                                  $18,700

Factory supplies used                                   $26,500

Beginning WIP                                                $13,000

Deduct:

Closing WIP                                                    -$17,100

Cost of goods manufactured                       $351,900  

b)

Opening finished goods                   $69,400

Add:

Cost of goods manufactured            $351,900

Deduct:

Ending finished goods                       - $48,200

Cost of goods sold                             $373,100