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    Cost of goods manufactured

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    The following information is taken for the accounts of the Apex Manufacturing Company:

    Account Balances:
    1/1/07 12/31/07
    Matierial $20,000 $10,000
    Supplies (manufacturing indirect materials) $5,000 $6,000
    Work-in-process $50,000 $80,000
    Finished Goods $80,000 $100,000
    Accounts Payable(only suppliers of direct materials)$30,000 $20,000
    Wages Payable, to production employees $25,000 $15,000
    Plant and Equipment $500,000 $600,000
    Accumulated Depreciation - Plant and Equip. $70,000 $120,000

    Additional information on cash disbursements for 2007
    To suppliers of raw materials (A/P) $110,000
    For manufacturing supplies (indirect materials) $10,000
    To production employees $250,000
    To purchase new equipment $100,000
    Salesmen's commission $75,000
    Repairs and maintenance of plant and equipment $5,000
    rent for administrative and sales offices $10,000
    property taxes on plant $4,000
    Plant $20,000
    Office $2,000

    Required: (hint: you can use T-accounts to calculate unknowns and then prepare the cost of goods manufactured statement in good form.)

    1. Calculate cost of direct materials used, cost of indirect materials used and overhead costs incurred for 207.

    2. Based on the information calculated in part 1, prepare a cost of goods manufactured statement for 2007.

    3. Calculate prime cost, conversion costs and period costs.

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    Solution Summary

    The solution explains how to calculate various costs and determine the cost of goods manufactured