Prepare answers in an Excel workbook
1. Preparing a schedule of cost of goods manufactured
Knight Corp., a lamp manufacturer, provided the following information for the
year ended December 31, 2014.
Inventories: Beginning Ending
Raw Materials $ 56,000 $ 23,000
Work-in-Process 103,000 63,000
Finished Goods 41,000 48,000
Other information:
Depreciation, plant building and equipment $ 16,000
Raw materials purchases 159,000
Insurance on plant 22,000
Sales salaries 46,000
Repairs and maintenance—plant 8,000
Indirect labor 32,000
Direct labor 122,000
Administrative expenses 59,000
Requirements
1. Use the information to prepare a schedule of cost of goods manufactured.
2. What is the unit product cost if Knight manufactured 2,160 lamps for the year?
Learning Objective 4
Learning Objective 4
1. COGM: $432,000
2. Computing cost of goods manufactured and cost of goods sold
Use the following information for a manufacturer to compute cost of goods
manufactured and cost of goods sold:
Inventories: Beginning Ending
Raw Materials $ 29,000 $ 32,000
Work-in-Process 44,000 37,000
Finished Goods 19,000 24,000
Other information:
Purchases of materials $ 77,000
Direct labor 87,000
Manufacturing overhead 45,000
COGM: $213,000
3. Problem P18-42 is the first problem in a sequence of problems for Davis Consulting, Inc.
This company was also used for the Continuing Problems in the financial accounting
chapters as the business evolved from a service company to a merchandising company.
However, it is not necessary to complete those problems prior to completing P18-42.
P18-42
Davis Consulting, Inc. is going to manufacture billing software. During its first
month of manufacturing, Davis incurred the following manufacturing costs:
Inventories: Beginning Ending
Raw Materials $ 10,800 $ 10,300
Work-in-Process 0 21,000
Finished Goods 0 31,500
Other information:
Raw materials purchases $ 19,000
Plant janitorial services 700
Sales salaries expense 5,000
Delivery expense 1,700
Sales revenue 750,000
Utilities for plant 10,000
Rent on plant 13,000
Customer service hotline costs 18,000
Direct labor 190,000
Prepare a schedule of cost of goods manufactured for Davis for the month ended
January 31, 2016.
