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Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094

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BuyFindarrow_forward

Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094
Textbook Problem

Cost of goods sold, cost of goods manufactured

Timbuk 3 Company has the following information for March:

Cost of direct materials used in production $21,000
Direct labor 54,250
Factory overhead 35,000
Work in process inventory, March 1 87,500
Work in process inventory, March 31 92,750
Finished goods inventory, March 1 36,750
Finished goods inventory, March 31 42,000

For March, determine (a) the cost of goods manufactured and (b) the cost of goods sold.

(a)

To determine

Cost of goods sold:

Cost of goods sold is the accumulate amount of all direct cost incurred in manufacturing the goods or the products which has been sold during a period. Cost of goods sold involves direct material, direct labor, and manufacturing overheads.

Cost of goods manufactured:

Cost of goods manufactured refers to the cost incurred for making a product that is available for sales at the end of the accounting period.

The cost of goods manufactured.

Explanation

The cost of goods manufactured is determined as follows:

Particulars

Amount

(in $)

Amount (in $)
Work in progress inventory, March 1 87,500
Cost of direct materials used in production21,000 
Direct labor54,250�...

(b)

To determine

The cost of goods sold.

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