Example #1 – CGM and CGS Based upon the following information obtained from Charter Company…

Example #1 – CGM and CGS

Based upon the following information obtained from Charter Company compute Cost of Goods Manufactured and Cost of Goods Sold:

Beginning Inventories:???Ending Inventories:

?Direct Materials? $10??Direct Materials?$12

??Work in Process?3??Work in Process? 8

??Finished Goods 30??Finished Goods? 15

Depreciation Expense – Factory?9?Direct Materials purchased? 25

Direct Labor??? 50?Misc. Expense – Factory? 6

Indirect Labor??? 10?Indirect Materials?? 2

Example #2 – Job Order Costing

Based on the following information determine CGM and CGS

Beginning Raw Materials inventory??? $61,500

Beginning Work in Process inventory (all on Job #1)?20,000

Transactions:

1. Raw materialspurchased, $45,600.

2. Materials requisitions – Job #1 – $51,900; Job #2 – $42,100; indirect $4,800.

3. Salaries and Wages – Job #1 – $66,000; Job #2 – 16,000; indirect $38,000.

4. Paid Property taxes — $14,400.

5. Depreciation on Factory Equip. – 12,000

6. Overhead applied. Estimated OH $70,000; Estimated DLH 8,000.

7. Completed Job #1.

8. Sold Job #1 for $250,000.