Q3TI - Horngren'S Financial And Managerial Accounting

Question

ABC Manufacturing Company has the following data for 2019 (amounts in millions): 

Direct Materials, January 1                                                       $ 5 

Direct Materials, December 31                                                  7 

Work-in-Process Inventory, January 1                                     12 

Work-in-Process Inventory, December 31                              16 

Finished Goods Inventory, January 1                                        8

 Finished Goods Inventory, December 31                               6 

Direct Materials Purchased, including Freight In                   25 

Direct Labor                                                                                  36 

Manufacturing Overhead                                                           17 

Prepare the schedule of cost of goods manufactured and the cost of goods sold section of the income statement for the year ended December 31, 2019.

Step-by-Step Solution

Answer

The cost of goods manufactured is $72 and the cost of goods sold is $74.

Step 1: Preparation of schedule of cost of goods manufactured

Step 2: Preparation of statement of cost of goods sold