Compute the Cost of Goods Manufactured and Cost of Goods Sold for

Clear BayClear Bay

Company for the most recent year using the amounts described next. Assume that Raw Materials Inventory contains only direct materials.

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Start the calculation for cost of goods manufactured by calculating the direct materials used.

Clear Bay Company
Calculation of Direct Materials Used
For Current Year
Beginning raw materials inventory		$20,000
Plus:	Purchases of direct materials	70,000
Materials available for use		90,000
Less:	Ending raw materials inventory	25,000
Direct materials used		$65,000

Calculate the cost of goods manufactured.

Clear Bay Company
Calculation of Cost of Goods Manufactured
For Current Year
Beginning work in process inventory
Plus:	Manufacturing costs incurred
	Direct materials used
	Direct labor
	Manufacturing overhead
Total manufacturing costs to account for
Less:	Ending work in process inventory
Cost of goods manufactured