Conway Manufacturing Company was started on January 1, 2014. The company was aff
ID: 2479140 • Letter: C
Question
Conway Manufacturing Company was started on January 1, 2014. The company was affected by the following events during its first year of operation.
1. Acquired $2,300 cash from the issue of common stock.
2. Paid $580 cash for direct raw materials.
3. Transferred $380 of direct raw materials to work in process.
4. Paid production employees $700 cash.
5. Paid $380 cash for manufacturing overhead costs.
6. Applied $195 of manufacturing overhead costs to work in process.
7. Completed work on products that cost $1,080.
8. Sold products that cost $860 for $1,630 cash.
9. Paid $390 cash for selling and administrative expenses.
10. Made a $70 cash distribution to the owners.
11. Closed the Manufacturing Overhead account.
Prepare a schedule of cost of goods manufactured and sold.
Explanation / Answer
Direct material 380 Direct labor 700 Manufacturing overhead 380 Total manufacturing cost 1460 Less: Ending WIP [1460-1080] - 380 COST OF GOODS MANufactured 1080 Less:ending finished goods inventory [1080-860] - 220 cost of goods sold 860 Add:overhead underapplied [380-195] 185 Adjusted cost of goods sold 1045