Question
The company uses an actual costing system. Sales and expenses have been static for the past few periods. Variable Selling expenses $79,000 Variable Utilities, factory/plant
The company uses an actual costing system. Sales and expenses have been static for the past few periods.
Variable Selling expenses $79,000
Variable Utilities, factory/plant 8,000
Rent, office 26,000
Depreciation, factory/plant equipment, straight-line 24,000
Purchases of direct materials 81,000
Rent, factory/plant 54,000
Sales 550,000
Insurance, factory/plant 6,000
Fixed Administration expenses 56,000
Indirect materials 12,000
Depreciation, office equipment, straight-line 11,000
Indirect factory/plant labour costs incurred 10,000
Maintenance, factory/plant 35,000
The factory works are paid on average $20/hour and they worked 7,500 hours this year.
Inventories Opening Ending
Direct Materials $14,000 $18,000
Work in Process 30,000 30,000
Finished Goods 28,000 28,000
REQUIRED:
1.Make a schedule of COGM and COGS
2.Based on your numbers above, create the journal entries for the following:
a. Direct materials used
Account Name Debit Credit
b. Cost of goods manufactured
Account Name Debit Credit
c. Cost of goods sold
Account Name Debit Credit
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