Cost of Goods Sold Cost of Goods Manufactured Piper Company

Cost of Goods Sold, Cost of Goods Manufactured Piper Company has the following information for July: Cost of direct materials used in production 56,000 Direct labor Factory overhead Work in process inventory, July1 Work in process inventory, July 31 Finished goods inventory, July1 Finished goods inventory, July 31 a. For July, determine the cost of goods manufactured. 62,000 22,000 48,000 47,000 28,000 21,000 b. For July, determine the cost of goods sold.

Solution

a) Cost of goods manufactured = Cost of Direct material used + direct labor + factoty overhead + beginning work in process - Ending work in process

= 56,000 + 62,000 + 22,000 + 48,000 - 47,000

= $141,000

b) Cost of goods sold = cost of goods manufactured + Beginning inventory of finished goods - Ending inventory of finished goods

= $141,000 + 28,000 - 21,000

= $148,000