The
cost of goods manufactured schedule is used to calculate the cost of producing products for a period of time. The cost of goods manufactured amount is transferred to the finished goods inventory account during the period and is used in calculating cost of goods sold on the income statement. The cost of goods manufactured schedule reports the total manufacturing costs for the period that were added to work-in-process, and adjusts these costs for the change in the work-in-process inventory account to calculate the cost of goods manufactured.
Red Car, Inc. Cost of Goods Manufactured Schedule For the Year Ended December 31, 20X0
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Direct materials used
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|
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Beginning raw materials inventory
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$ 6,200
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|
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Add: Cost of raw materials purchased
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49,400
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|
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Total raw materials available
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55,600
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|
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Less: Ending raw materials inventory
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(5,800)
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|
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Total raw materials used
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$ 49,800
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Direct labor
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|
125,600
|
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Manufacturing overhead
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|
|
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Indirect materials
|
4,100
|
|
|
Indirect labor
|
43,700
|
|
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Depreciation—factory building
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9,500
|
|
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Depreciation—factory equipment
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5,400
|
|
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Insurance—factory
|
12,000
|
|
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Property taxes—factory
|
4,500
|
|
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Total manufacturing overhead
|
|
79,200
|
|
Total manufacturing costs
|
|
254,600
|
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Add: Beginning work-in-process inventory
|
|
10,20
|
|
|
264,800
|
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Less: Ending work-in-process inventory
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(9,800)
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|
Cost of goods manufactured
|
|
$255,000
|
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The cost of goods manufactured for the period is added to the finished goods inventory. To calculate the cost of goods sold, the change in finished goods inventory is added to/subtracted from the cost of goods manufactured.
Red Car, Inc. Income Statement For the Year Ended December 31, 20X0
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Sales
|
|
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$427,000
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Cost of goods sold
|
|
|
|
|
Beginning finished goods inventory
|
|
$ 14,500
|
|
|
Cost of goods manufactured
|
|
255,00
|
|
|
Total goods available for sale
|
|
269,500
|
|
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Ending finished goods inventory
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(12,600)
|
|
|
Cost of goods sold
|
|
|
256,900
|
|
Gross profit
|
|
|
170,100
|
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Operating expenses
|
|
|
|
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Selling expenses
|
|
|
|
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Sales salaries
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$65,300
|
|
|
|
Depreciation—sales equipment
|
21,000
|
|
|
|
Total selling expenses
|
|
86,300
|
|
|
Administrative expenses
|
|
|
|
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Office salaries
|
35,000
|
|
|
|
Depreciation—office equipment
|
12,000
|
|
|
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Insurance expense
|
9,000
|
|
|
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Office supplies expense
|
2,400
|
|
|
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Total administrative expenses
|
|
58,400
|
|
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Total operating expenses
|
|
|
144,700
|
|
Income from operations
|
|
|
25,400
|
|
Interest revenue
|
|
|
5,100
|
|
Income before taxes
|
|
|
30,500
|
|
Income taxes
|
|
|
10,675
|
|
Net income
|
|
|
$ 19,825
|
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Current Liabilities
Managerial and Cost Accounting Concepts
