Q42CP - Horngren'S Financial And Managerial Accounting

Question

This is the first problem in a sequence of problems for Piedmont Computer Company, a manufacturer of personal computers and tablets. During its first month of manufacturing, Piedmont Computer Company incurred the following manufacturing costs: 

Balances: Beginning Ending 

Direct Materials \( 10,500 \) 9,700 

Work-in-Process Inventory 0 17,000 

Finished Goods Inventory 0 31,000 

Other information: 

Direct materials purchases $ 16,000 

Plant janitorial services 500 

Sales salaries expense 10,000 

Delivery expense 1,600 

Sales revenue 1,100,000

 Utilities for plant 16,000 

Rent on plant 9,000 

Customer service hotline costs 19,000 

Direct labor 210,000 

Prepare a schedule of cost of goods manufactured for Piedmont Computer Company for the month ended January 31, 2020.

Step-by-Step Solution

Answer

The cost of goods manufactured is $235,300.

Step-by-Step Solution Step 1: Definition of direct materials

The direct materials are defined as the raw materials which are used in the production process directly by the company.

Step 2: Preparation of schedule of cost of goods manufactured

Piedmont Computer Company
Schedule of cost of goods manufactured
Month Ended January 31, 2020
	Amount ($)	Amount ($)	Amount ($)
Beginning WIP Inventory			$0
Direct Material Used:
Beginning Direct Materials	$10,500
Purchases of direct material	16,000
Direct Materials Available for use	26,500
Ending Direct Materials	-9,700
Direct Material Used		16,800
Direct Labor		210,000
Manufacturing Overhead
Plant Janitorial Services	500
Utilities For plant	16,000
Rent on plant	9,000
Total manufacturing Overhead		25,500
Total manufacturing cost incurred during month			252,300
Total manufacturing cost to account for			252,300
Ending WIP Inventory			-17,000
Cost of goods manufactured			$235,300