Manufacturing Worksheet - Chunky Milk Assumptions: Raw milk costs $2/gallon one batch = 100 gallons Chunking one batch of milk requires 5 hours of direct labor 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 4 Raw Materials available for use is $2600 Direct Material Used is $2000 Balance Sheet Income Statement Raw Materials Inventory Sales WIP Inventory Less COGS Finished Goods Inventory Gross Profit Total Inventory Gross Margin