Question

Cepeda Corporation has the following cost records for June 2020. Indirect factory labor $4,760 Factory utilities $470 Direct materials used 22,680 Depreciation, factory equipment 1,540 Work in process, 6/1/20 3,540 Direct labor 42,930 Work in process, 6/30/204,880 Maintenance, factory equipment 1,850 Finished goods, 6/1/20 5,940 Indirect materials 2,820 Finished goods, 6/30/20 7,940 Factory manager's salary 3,120 (a) Prepare a cost of goods manufactured schedule for June 2020. CEPEDA CORPORATION Cost of Goods Manufactured Schedule Save for Later

Answer 1

Solution - Value of cost of goods manufactured is equal to all the direct cost and overheads related to production being added to opening work in progress inventory and subtracting the balance inventory at end of month i.e. closing work in progress inventory. It can also be explained as formula below.

COST OF GOODS MANUFACTURED = OPENING WIP + DIRECT PRODUCTION COST + PRODUCTION OVERHEADS - CLOSING WIP

Accordingly, please find below the cost of goods manufactured schedule of CEPEDA Corporation for m/o June 2020 on the basis of available cost records.

CEPEDA Corporation

Cost of Goods Manufactured Schedule

JUNE 2020

Work in Process - 6/1/2020 $3540

Add

Direct Material Used $22680

Direct Labor $42930

Production Overheads

Indirect Factory Labor $4760

Factory Utilities $470

Factory Manager's Salary $3120

Maintenance, Factory Equipment $1850

Depreciation, Factory Equipment $1540

Total Production Overheads $11740

Total Cost and Overheads $75810

TOTAL PRODUCTION COST $80890

Less - Work in Process 6/30/2020 - $4880

COST OF GOODS MANUFACTURED $76010