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 3
We purchase 1500 gallons of milk
Raw Materials Ending Inventory is 0
WIP ending inventory is 1 batch
Finished Goods ending inventory is 3 batches
	Schedule of Raw Materials		Work in Process (WIP)		Schedule of Cost of Goods Sold
Period 3	Batches	Dollars		Batches	Dollars		Batches	Dollars
Beginning Inventory			Beginning Inventory			Beginning Inventory
+Purchases			+ Direct Materials Used			+Cost of Goods Manufactured
=Raw materials available for use			+Direct Labor			=Cost of Goods Available for Sale
-Ending Inventory			+FOH			-Ending Inventory
=Direct Materials Used (Transferred to WIP)			=Total Manufacturing Costs			=Cost of Goods Sold
			-Ending Inventory
			=Total Costs of Goods Manufactured (Transferred to Finished Goods)