Required information The following information applies to th

Required information [The following information applies to the questions displayed below.] Bodin Company manufactures finger splints for kids who get tendonitis from playing video games. The firm had the following inventories at the beginning and end of the month of January Finished goods Work in process Raw material January 1 125,000 233,000 132,000 January 31 117,000 251,000 124,000 The following additional data pertain to January operations Raw material purchased Direct labor Actual manufacturing overhead Actual selling and administrative expenses $190,000 350,000 170,000 115,000 The company applies manufacturing overhead at the rate of 60 percent of direct-labor cost. Any overapplied or underapplied manufacturing overhead is accumulated until the end of the year. 4. Compute the cost of goods sold for January ost of goods sold

Solution

4. Cost of goods sold for January: $748,000

Workings:

BODIN COMPANY
Cost of Goods Sold
For the Month of January
Beginning raw materials $	132000
Add: Raw material purchased	190000
Raw materials available for use	322000
Less: Ending raw materials	124000
Raw materials used	198000
Direct labor	350000
Manufacturing overhead applied ($350000 x 60%)	210000
Total current manufacturing costs	758000
Add: Beginning work in process	233000
Total cost of work in process	991000
Less: Ending work in process	251000
Cost of goods manufactured $	740000
Add: Beginning finished goods	125000
Cost of goods available for sale	865000
Less: Ending finished goods	117000
Cost of goods sold $	748000