Cost of Goods Sold Budget Wilmington Chemical Company uses oil to produce two ty
ID: 2431634 • Letter: C
Question
Cost of Goods Sold Budget
Wilmington Chemical Company uses oil to produce two types of plastic products, P1 and P2. Wilmington budgeted 16,200 barrels of oil for purchase in June for $65 per barrel. Direct labor budgeted in the chemical process was $126,400 for June. Factory overhead was budgeted $189,500 during June. The inventories on June 1 were estimated to be:
The desired inventories on June 30 were:
Use the preceding information to prepare a cost of goods sold budget for June.
Oil $8,800 P1 5,900 P2 5,100 Work in process 7,300Explanation / Answer
Wilmington Chemical Company Cost of Goods Sold Budget For the Month Ending June 30 Finished goods inventory, June 1 $ 11,000 Work in process inventory, June 1 7,300 Direct materials: Direct materials inventory, June 1 8,800 Direct materials purchases 10,53,000 Cost of direct materials available for use 10,61,800 Less direct materials inventory, June 30 9,700 Cost of direct materials placed in production 10,52,100 Direct labor 1,26,400 Factory overhead 1,89,500 Total manufacturing costs 13,68,000 Total work in process during the period 13,75,300 Less work in process inventory, June 30 7,600 Cost of goods manufactured 13,67,700 Cost of finished goods available for sale 13,78,700 Less finished goods inventory, June 30 10,200 Cost of goods sold $ 13,68,500 Working: P1 P2 Total Beginning Finished goods Inventory $ 5,900 $ 5,100 $ 11,000 Cost of direct materials purchased = 16200*65 = 10,53,000 P1 P2 Total Ending Finished goods Inventory $ 5,400 $ 4,800 $ 10,200