Prepare a cost of goods sold budget for the Hathaway Manufacturing Co. for the y
ID: 2497674 • Letter: P
Question
Prepare a cost of goods sold budget for the Hathaway Manufacturing Co. for the year ended December 31, 2015, from the following estimates.
Inventories of production units:
Work-in- Process Finished Goods
January 1, 2015...................................................................................... $28,500 $19,300
December 31, 2015...................................................................................... 23,700 22,400
Direct materials purchased during the year, $854,000; beginning inventory of direct materials, $31,000; and ending inventory of direct materials, $26,000. Totals from other budgets included:
Direct Labor Cost................................................................................................................ $539,500
Total Factory Overhead Costs........................................................................................... 818,000
Required:
Prepare a cost of goods sold budget for the Hathaway Manufacturing Co. for the year ended December 31, 2015.
Hathaway Manufacturing Company Cost of Goods Sold Budget For the Year Ended December 31, 2015 Finished goods inventory, Jan. 1 Work in process inventory, Jan. 1 Direct materials inventory, Jan. 1 Direct materials purchases Direct materials available Less direct materials inventory, Jan. 31 Cost of direct materials used Direct labor Factory overhead Total manufacturing costs Total work in process during year Less work in process inventory, Dec. 31 Cost of goods manufactured Cost of goods available for sale Less finished goods inventory, Dec. 31 Cost of goods soldExplanation / Answer
Solution:
Hathaway Manufacturing Company Cost of Goods Sold Budget For the year Ended December 31, 2015 Finished Goods inventory, Jan 1 19,300 Work in Progress inventory, Jan 1 28,500 Direct materials inventory, Jan 1 31,000 Direct Materials purchases 854,000 Direct material available 885,000 Less: Direct materials inventory, Jan 31 26,000 Cost of direct materials used 859,000 Direct Labor 539,500 Factory overhead 818,000 Total Manufacturing costs 2,216,500 Total work in process during year 2,245,000 Less: work in progress inventory, Dec 31 23,700 Cost of goods manufactured 2,221,300 Cost of goods available for sale 2,240,600 Less: finished goods inventory, Dec 31 22,400 Cost of gooods sold 2,218,200