Question

Sandbagger Company has the following information for December:

Cost of direct materials used in production	$	63,000
Direct labor		71,000
Factory overhead		29,000
Work in process inventory, December 1		52,000
Work in process inventory, December 31		41,000
Finished goods inventory, December 1		25,000
Finished goods inventory, December 31		16,000

a. For December, determine the cost of goods manufactured.
$

b. For December, determine the cost of goods sold.
$

Answer 1

a)

Cost of goods manufactured

$174,000

Explanation:-

Work in process inventory, December 1		$52,000
Cost of direct Materials used in production	$63,000
Direct labor	$71,000
Factory overhead	$29,000
Total manufacturing costs incurred in December		$163,000
Total manufacturing costs ($163,000 +$52,000)		$215,000
Work in process inventory, December 31		($41,000)
Cost of goods manufactured		$174,000

b)

cost of goods sold

$183,000

Explanation:-

Finished goods inventory, December 1	$25,000
Cost of goods manufactured	$174,000
Cost of finished goods available for sale		$199,000
Finished goods inventory, December 31		($16,000)
Cost of goods sold		$183,000