As consultants, we are hired to help the company track and report costs. The following Tableau Dashboard is provided to assist us in our analysis.

 Tableau DA 2-2: Exercise, Computing cost of goods sold LO P1, P2, P3

As consultants, we are hired to help the company track and report costs. The following Tableau Dashboard is provided to assist us in our analysis.

 

1. Compute cost of direct labor used.
2. Compute cost of direct materials used.
3. Compute cost of goods manufactured.
4. Compute cost of goods sold. (Do not consider any underapplied or overapplied overhead.)

Explanation

1.

Cost of direct labor used
Factory payroll	$ 57,000
Less indirect labor used	7,000
Cost of direct labor used	$ 50,000

2.

Cost of direct materials used
Raw materials inventory, beginning	$ 10,000
Raw materials purchases	40,000
Raw materials available for use	50,000
Less raw materials inventory, ending	12,000
Total raw materials used	38,000
Less indirect materials used	5,000
Cost of direct materials used	$ 33,000

3.

Cost of goods manufactured
Direct materials used*	$ 33,000
Direct labor used**	50,000
Factory overhead applied (70% × $50,000 direct labor)	35,000
Total manufacturing costs	118,000
Add work in process inventory, beginning	15,000
Total cost of work in process	133,000
Less work in process inventory, ending	20,000
Cost of goods manufactured	$ 113,000

*See part 2 for calculation
** See part 1 for calculation

4.

Cost of goods sold
Finished goods inventory, beginning	$ 7,500
Cost of goods manufactured*	113,000
Less finished goods inventory, ending	10,000
Cost of goods sold	$ 110,500

*See part 3 for calculation

 

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