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 4 Raw Materials available for use is $2600 Direct Material Used is $2000 COGM is $3,285 COGS is $2,920 Schedule of Raw Materials Work in Process (WIP) Schedule of Cost of Goods Sold Period 4 Batches Dollars Batches Dollars Batches Dollars Beginning Inventory Beginning Inventory Beginning Inventory +Cost of Goods Manufactured +Purchases + Direct Materials Used =Raw materials available for use =Cost of Goods Available for Sale +Direct Labor -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)