Information for Basic Factory, Inc., as of December 31 follows: Raw materials inventory, January 1 $ 88,000 Raw materials inventory, December 31 68,000 Goods in process inventory, January 1 25,000 Goods in process inventory, December 31 28,900 Finished goods inventory, January 1 120,000 Finished goods inventory, December 31 88,700 Depreciation of factory equipment 27,000 Direct labor 88,000 Factory supplies used 9,500 Raw materials purchases 180,000 Depreciation of delivery vehicles 12,000 Factory building rent 20,000 Sales commissions 40,500 Factory utilities 16,000 Interest expense 8,000 Factory insurance 17,000 Required: Prepare a Cost of Goods Manufactured statement for the year ended December 31. Use the columnar paper on page 2 for your answer.

Total cost of goods manufactured = $373,600

Explanation:

Giving the following information:

Raw materials:

Raw materials inventory, January 1 = $88,000

Raw materials inventory, December 31 = $68,000

Raw materials purchases = $180,000

Direct material used = $200,000

Work in process:

WIP, January 1 = 25,000

WIP, December 31 = 28,900

Direct labor 88,000

Overhead:

Depreciation of factory equipment 27,000

Factory supplies used 9,500

Factory building rent 20,000

Factory utilities 16,000

Factory insurance 17,000

Total overhead = 89,500

To calculate the cost of goods manufactured, we need to use the following formula:

Cost of goods manufactured = beginning WIP + direct materials + direct labor + allocated manufacturing overhead - Ending WIP

Cost of goods manufactured:

Beginning WIP = 25,000

Direct material used = 200,000

Direct labor = 88,000

Manufacturing overhead = 89,500

Ending WIP = (28,900)

Total = $373,600