Solution Assignment # 2

Question # 1

1. Merchandise inventory, April 1 .......................................... $ 38,000

Add purchases................................................................... 121,000
Merchandise available for sale .......................................... $159,000
Less merchandise inventory, April 30................................ 33,000
Cost of goods sold............................................................. $126,000

2. Finished goods, April 1 ...................................................... $ 67,000

Add cost of goods manufactured....................................... 287,000
Finished goods available for sale ...................................... $354,000
Less finished goods, April 30............................................. 61,000
Cost of goods sold............................................................. $293,000
Question # 2

Coral Park Production Co.

Statement of Cost of Goods Manufactured
For the Month Ended January 31, 20
a. Direct Materials:
Inventory, January 1..................................................... $ 25,000
Add Purchases............................................................. 21,000
Total cost of available materials ................................... $ 46,000
Less inventory, January 31 ...................................... 22,000
Cost of materials used ................................................. $ 24,000
Less indirect materials used..................................... 1,000
Cost of direct materials used in production .................. $ 23,000
Direct labor....................................................................... 18,000
Factory overhead:
Indirect materials.......................................................... $ 1,000
Indirect labor ................................................................ 3,000
Other ............................................................................ 8,000
Total factory overhead ................................................. 12,000
Total manufacturing cost .................................................. $ 53,000
Add work in process inventory, January 1.................... 24,000
$ 77,000
Less work in process inventory, January 31................. 20,000
Cost of goods manufactured ............................................ $ 57,000

b. Finished goods inventory, January 1................................ $ 32,000

Add cost of goods manufactured...................................... 57,000
Goods available for sale................................................... $ 89,000
Less finished goods inventory, January 31 ...................... 30,000
Cost of goods sold ........................................................... $ 59,000