Craig Corporation incurred the following costs while manufacturing its product.

Question

Craig Corporation incurred the following costs while manufacturing its product.   

  Work-in-process inventory was $13,470 at January 1 and $12,300 at December 31. Finished goods inventory was $62,910 at January 1 and $57,180 at December 31.  

Instructions

(a) Compute cost of goods manufactured.
(b) Compute cost of goods sold.   

Materials used in product $105,150 Advertising expense $43,520 Depreciation on plant 61,850 Property taxes on plant 18,190 Property taxes on store 7,581 Delivery expense 21,470 Labor costs of assembly-line workers 105,720 Sales commissions 32,130 Factory supplies used 24,430 Salaries paid to sales clerks 47,100

Explanation / Answer

Hi,

Please find the answer as follows:

Part A:

Cost of Goods Manufactured = 316510

Part B:

Cost of Goods Sold = Cost of Goods Manufactured + Opening Stock of Finished Goods - Closing Stock of Finished Goods = 316510 + 62910 - 57180 = 322240

Thanks.

Cost of Goods Manufactured Materials used in product
105150 Labor costs of assembly-line workers
105720 Overheads

Factory supplies used 24430
Property taxes on plant 18190
Depreciation on plant 61850
Total Overheads 104470 104470 Total Manufacturing Cost
315340 Add Opening WIP
13470 Less Closing WIP
-12300 Cost of Goods Manufactured
316510

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