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

Blue Sea

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.

Blue Sea Company
Calculation of Direct Materials Used
For Current Year
Beginning work in process inventory		38000
Plus:	Cost of goods manufactured
Total manufacturing costs to account for
Less:	Ending work in process inventory
Direct materials used

Calculate the cost of goods manufactured.

Blue Sea Company
Calculation of Cost of Goods Manufactured
For Current Year
Plus:	Manufacturing costs incurred
Less:
Cost of goods manufactured

Now calculate the cost of goods sold.

Blue Sea Company
Calculation of Cost of Goods Sold
For Current Year
Plus:
Less:
Cost of goods sold

Raw materials inventory. . . . . . . .

$27,000

$30,000

Insurance on plant. . . . . . . . . . . . . . . . . . . . . . .

$11,000

Work in process inventory. . . . . .

$38,000

$31,000

Depreciation-plant building and equipment. . . .

$12,800

Finished goods inventory. . . . . . .

$17,000

$28,000

Repairs and maintenance-plant. . . . . . . . . . . . .

$3,900

Purchases of direct materials. . . .

$78,000

Marketing expenses. . . . . . . . . . . . . . . . . . .

$83,000

Direct labor. . . . . . . . . . . . . . . .

$80,000

General and administrative expenses. . . . . . . .

$23,500

Indirect labor. . . . . . . . . . . . . . . . .

$46,000