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Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
ISBN: 9781337115773

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BuyFindarrow_forward

Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
ISBN: 9781337115773
Textbook Problem
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Cost of Goods Manufactured, Cost of Goods Sold

Hayward Company, a manufacturing firm, has supplied the following information from its accounting records for the month of May:

Chapter 2, Problem 55P, Cost of Goods Manufactured, Cost of Goods Sold Hayward Company, a manufacturing firm, has supplied

Required:

  1. 1. Prepare a statement of cost of goods manufactured.
  2. 2. Prepare a statement of cost of goods sold.

1.

To determine

Prepare the statement of cost of goods manufactured.

Explanation

Statement of Cost of Goods Manufactured:

Cost of goods manufactured can be defined as the total amount of cost incurred by a company to complete the goods and transfer the completed goods to the finished goods inventory.

In order to facilitate the external financial reporting, the statement of cost of goods manufactured (COGM) is prepared because the cost of goods manufactured is the most vital element of the income statement. COGM must be determined before calculating the cost of goods sold (COGS).

The statement of cost of goods manufactured is given below:

Company H
Statement of Cost of Goods Manufactured
For the month of May
 Amount ($)Amount ($)
Direct materials used in production 8,975
Direct labor 10,500
Manufacturing overheads:  
Factory supplies675 
Factory insurance350 
Factory supervision2,225 
Material handling3,750 
Total manufacturing cost

2.

To determine

Prepare the statement of cost of goods sold.

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