Cost of Goods Sold, Cost of Goods Manufactured Piper Company has the following i
ID: 2465309 • Letter: C
Question
Cost of Goods Sold, Cost of Goods Manufactured Piper Company has the following information for January:
Cost of direct materials used in production $ 61,000
Direct labor 68,000
Factory overhead 26,000
Work in process inventory, January 1 49,000
Work in process inventory, January 31 49,000
Finished goods inventory, January 1 22,000
Finished goods inventory, January 31 17,000
a. For January, determine the cost of goods manufactured. $ -------------
b. For January, determine the cost of goods sold. $___________
Explanation / Answer
Answer :
The formula for the cost of goods manufactured is the costs of: direct materials used + direct labor used + manufacturing overhead assigned = the manufacturing costs incurred in the current accounting period + beginning work-in-process inventory - ending work-in-process inventory
which comes out to be : $61,000 + 68,000 + 26,000 +49,000 - 49,000 = $155,000
Therefore, a). For January, determine the cost of goods manufactured. $ 155,000
To compute cost of goods sold, start with the cost of beginning inventory of finished goods, add the cost of goods manufactured, and then subtract the cost of ending inventory of finished goods.
which comes out to be : 22,000 + 155,000 - 17,000 = $ 160,000
Therefore , b. For January, determine the cost of goods sold. $ 160,000