Accounting 311 Manufacturing Worksheet - Chunky Milk Balance Sheet Income Statement Assumptions : Raw Materials Inventory Sales Raw milk costs $2/gallon WIP Inventory Less COGS one batch = 100 gallons Finished Goods Inventory Gross Profit Chunking one batch of milk requires 5 hours of direct labor Total Inventory Gross Margin Milk chunkers are paid $15/hour FOH is applied at a rate of 120% of direct labor dollars Direct labor is added at the beginning of the conversion process FOH is appled at the end of the conversion process We sell our chunky milk for $5/gallon Period 1 Beginning Inventory is $0 We purchase 800 gallons of milk Raw materials ending inventory is 3 batches WIP ending inventory is 2 batches batches We sold 200 gallons of milk Schedule of Raw Materials Work in Process (WIP) Schedule of Cost of Goods Sold Period 1 Batches Dollars Batches Dollars Batches Dollars Beginning Inventory Beginning Inventory Beginning Inventory +Cost of Goods + Purchases + Direct Materials Used Manufactured =Raw materials available Cost of Goods Available for use +Direct Labor for Sale -Ending Inventory +FOH Ending Inventory =Direct Materials Used =Total Manufacturing (Transferred to WIP) Costs =Cost of Goods Sold -Ending Inventory Total Costs of Goods Manufactured (Transferred to Finished Goods)