Cost of Goods Sold Budget Universal Chemical Company uses oil to produce two typ
ID: 2462892 • Letter: C
Question
Cost of Goods Sold Budget
Universal Chemical Company uses oil to produce two types of plastic products, P1 and P2. Universal budgeted 29,100 barrels of oil for purchase in April for $71 per barrel. Direct labor budgeted in the chemical process was $247,900 for April. Factory overhead was budgeted $371,900 during April. The inventories on April 1 were estimated to be:
The desired inventories on April 30 were:
Use the preceding information to prepare a cost of goods sold budget for April 2017.
Oil $17,400 P1 11,700 P2 9,900 Work in process 14,400Explanation / Answer
Universal Chemical Company
Cost of Goods Sold Budget
For the Month Ending April 30, 2017
Finished goods inventory, April 1, 2017 (11700+9900)
$ 21,600
Work in process inventory, April 1, 2017
$ 14,400
Direct materials:
Direct materials inventory, April 1, 2017
$ 17,400
Add: Direct materials purchases
$ 29,100
Cost of direct materials available for use
$ 46,500
Less: direct materials inventory, April 30, 2017
$ (19,100)
Cost of direct materials placed in production
$ 27,400
Direct labor
$247,900
Factory overhead
$371,900
Total manufacturing costs (27400+247900+371900)
$647,200
Total work in process during the period (647200+14400)
$661,600
Less work in process inventory, April 30, 2017
$ (14,900)
Cost of goods manufactured
$646,700
Cost of finished goods available for sale (21600+646700)
$668,300
Less finished goods inventory, April 30, 2017 (10700+9400)
$ (20,100)
Cost of goods sold
$648,200
Universal Chemical Company
Cost of Goods Sold Budget
For the Month Ending April 30, 2017
Finished goods inventory, April 1, 2017 (11700+9900)
$ 21,600
Work in process inventory, April 1, 2017
$ 14,400
Direct materials:
Direct materials inventory, April 1, 2017
$ 17,400
Add: Direct materials purchases
$ 29,100
Cost of direct materials available for use
$ 46,500
Less: direct materials inventory, April 30, 2017
$ (19,100)
Cost of direct materials placed in production
$ 27,400
Direct labor
$247,900
Factory overhead
$371,900
Total manufacturing costs (27400+247900+371900)
$647,200
Total work in process during the period (647200+14400)
$661,600
Less work in process inventory, April 30, 2017
$ (14,900)
Cost of goods manufactured
$646,700
Cost of finished goods available for sale (21600+646700)
$668,300
Less finished goods inventory, April 30, 2017 (10700+9400)
$ (20,100)
Cost of goods sold
$648,200