Accounting 2 Final Exam Study

Cost of Goods Sold Formula

Beginning Finished Goods Inventory + Cost of Goods Manufactured- Ending Finished Goods Inventory

Beginning Finished Goods Inventory had 100 units that had a unit cost of $50 each. Ending Finished Goods Inventory has 200 units left. Using the results from each Requirement 3, calculate cost of goods sold assuming FIFO inventory costing is used

Beginning Finished Goods Inventory(100 units x $50 per unit) $5,000(C) Cost of Goods Manufactured $51,000 (C) Cost of Goods Available for Sale $56,000 (C) Ending Finished Goods Inventory(200 units x $51 unit) (10,200)(C) COst of Goods Sold [(100 unitsx $50 per unit) +(800 unitsx $51 per unit)] 45,800(C)

Direct Materials Used Formula

Beginning Raw Materials + Purchases and Freight In- Ending Raw Materials Inventory

Cost of Goods Manufactured Formula

Beginning Work-in Process Inventory +Direct Materials Used+ Direct Labor+ Manufacturing Overhead- Ending Work-in-Process Inventory

Using the results from term 9 calculate the cost per unit for goods manufactured assuming 1,000 units were manufactured

Costs of goods manufactured $51,000/ total units produced 1,000 units= unit product cost $51 per unit

Show how to compute cost of goods manufactured. Use the following amounts: direct materials used, $24,000; direct labor, $9,000; manufacturing overhead, $17,000; beginning Work-in-Process Inventory, $5,000; and ending Work-in-Process Inventory $4,000

Debit (left) Credit (right) Beginning Work-in-Process Inventory $5,000(C) Direct Materials Used $24,000(D) Direct Labor $9,000(D) Manufacturing Overhead $17,000(D) Total Manufacturing Costs Incurred during Period 50,000(C) Total Manufacturing Costs to Account for 55,000(C) Ending Work-in-Process Inventory (4,000)(C) Cost of Goods Manufactured 51,000(C)

Product Costs Examples

Depreciation on plant equip Insurance on plant building Raw materials Manufacturing overhead Production employee wages

Period Costs Examples

Depreciation on salespersons' automobiles Marketing manager's salary Electricity bill for home office

Cost of Goods Sold

Number of units sold x Unit productcost

Unit cost per item

total cost of goods sold / total number of items sold

Unit cost per service

total costs / total number of services provided