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.

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.


Asked by 4 months ago
365.9k points

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.

Beginning of Year End of Year End of Year
Raw materials inventory \$27,000 \$31,000 Insurance on plant \$8,000
Work in process inventory \$43,000 \$28,000 Depreciation-plant building and equipment \$12,700
Finished goods inventory \$16,000 \$29,000 Repairs and maintenance-plant \$4,100
Purchases of direct materials \$79,000 Marketing expenses \$76,000
Direct labor \$83,000 General and administrative expenses \$27,500
Indirect labor \$46,000
Compute the
JasonJones

1 Answer

Answered by 4 months ago
365.9k points

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 raw materials inventory \$27,000
Plus: Purchases of direct materials 79,000
Materials available for use 106,000
Less: Ending raw materials inventory 31,000
Direct materials used \$75,000

Calculate the cost of goods manufactured.

Blue Sea Company
Calculation of Cost of Goods Manufactured For Current Year
Beginning work in process inventory \$43,000
Plus: Manufacturing costs incurred
Direct materials used \$75,000
Direct labor 83,000
Manufacturing overhead 70,800
Total manufacturing costs to account for 271,800
Less: Ending work in process inventory 28,000
Cost of goods manufactured \$243,800

Now calculate the cost of goods sold.

Blue Sea Company
Calculation of Cost of Goods Sold For Current Year
Beginning finished goods inventory \$16,000
Plus: Cost of goods manufactured 243,800
Cost of goods available for sale 259,800
Less: Ending finished goods inventory 29,000
Cost of goods sold \$230,800

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Asked: 4 months ago

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