Chapter 18, Problem 13E

To determine

Concept Introduction: Cost of goods manufactured-

Cost of manufactured goods represents total cost pertaining to finished goods produced in the accounting period. The manufacture first uses the raw material and with the help of direct labor and manufacturing overheads converts them into finished goods.

To Prepare:

To prepare schedule of cost of goods manufactured.

Answer to Problem 13E

Schedule of cost of goods manufactured
Particulars	Amount ($)	Amount ($)
Raw materials-
Raw materials inventory, Beginning	37,000
Purchase of raw material	175,600
Rw material available for use	212,600
Less: Raw material inventory, Ending	(42,700)
Raw material used		169,900
Direct labor		225,000
Manufacturing overhead-
Factory supplies used	17,840
Indirect labor	47,000
Repairs- Factory equipment	5,250
Rent cost of factory building	57,000
Total manufacturing overhead		127,090
Total manufacturing costs		521,990
Add: Work in process inventory, Beginning		53,900
Total cost of work in process		575,890
Less: Work in process inventory, Ending		41,500
Cost of goods manufactured		534,390

Explanation of Solution

  $\begin{array}{l}\begin{array}{l}Rawmaterialused=Rawmaterialsinventory,Beginning+Purchaseofrawmaterial\\ -Rawmaterialinventory,Ending\end{array}\hfill \\ Rawmaterialused=\$37,000+\$175,600-\$42,700\hfill \\ Rawmaterialused=169,900\hfill \end{array}$

  $\begin{array}{l}\begin{array}{l}Totalmanufacturingoverhead=Factorysuppliesused+Indirectlabor+\\ Repairs-Factoryequipment+Rentcostoffactorybuilding\end{array}\hfill \\ Totalmanufacturingoverhead=\$17,840+\$47,000+\$5,250+\$57,000\hfill \\ Totalmanufacturingoverhead=\$127,090\hfill \end{array}$

  $\begin{array}{l}Totalmanufacturingcosts=Rawmaterialused+DirectLabor+Totalmanufacturingoverhead\hfill \\ Totalmanufacturingcosts=\$169,900+\$225,000+\$127,090\hfill \\ Totalmanufacturingcosts=\$521,990\hfill \end{array}$

Cost of goods manufactured is calculated as follows-

  $\begin{array}{l}\begin{array}{l}Costofgoodsmanufactured=Totalmanufacturingcosts+Workinprocessinventory,Beginning\\ -Workinprocessinventory,Ending\end{array}\hfill \\ Costofgoodsmanufactured=\$521,990+\$53,900-\$41,500\hfill \\ Costofgoodsmanufactured=\$534,390\hfill \\ \hfill \end{array}$

Conclusion:

Thus, Cost of goods manufactured calculated is $534,390.