Cost of goods manufactured
I am new to accounting, I have been given an assignment that is giving me a headache and I need help asap.
In calculating the cost of goods manufactured if there are two different years which one do we use or do we use both.
Please find below my assignment and my answer. I do not know whether what I have done is right. Please help me.
B.H. Roberts Company produced 4,000 loveseats during the year. The loveseats sell for $800 each. Roberts had 600 loveseats in finished goods inventory at the beginning of the year. At the end of the year, there were 800 loveseats in finished goods inventory. Roberts accounting records provide the following information:
Purchases of materials
. $640,000
Direct materials inventory Dec. 31, 2005
93,600
Direct materials inventory Dec. 31, 2006
133, 600
Direct labor
400,000
Rent, factory building
80,000
Depreciation, factory equipment
.. 120,000
Utilities, factory
.. 23,912
Salary, sales supervisor
. 180,000
Commissions, sales persons
360,000
General administration
600,000
Work-in-process inventory Dec. 31, 2005
. 26,080
Work-in-process inventory Dec 31, 2006
.. 29,992
Finished goods inventory, Dec 31, 2005
. 160,000
Finished goods inventory, Dec. 31, 2006
.. 228,200
Write the cost of goods manufactured statement.
Below is my answer
Direct materials
Beginning inventory Dec 31, 2005
. 93, 600
Add: Purchases
640, 000
Materials available
. 733, 600
Less: finished goods inventory Dec 31 2005
. 160, 000
Direct materials used
673,600
Direct labor
400,000
Manufacturing overhead:
Indirect labor
80,000
Depreciation, factory equipment
. 120,000
Rent, factory building
84,000
Utilities, factory
23, 912 273,600
Total manufacturing costs added
307,912
Add: Work in process inven Dec 31, 2005
.. 26,080
Total manufacturing costs
.. 333,992
Less work in process Dec 31, 2005
.. 29,992
Cost of Goods manufactured
.. 304,000