Answer:
Hayward Company
Statement of Cost of Goods Manufactured
For the month Ended May 31
Raw Materials
Raw material, beginning $3,475
Add:Purchases 18,475
Raw materials available 21,950
Less: Raw material, end 9,500
Cost of raw material used 12,450
Add: Direct labor 10,500
Prime Cost 22,950
Add:Manufacturing overhead 6,550
Manufacturing cost 29,500
Add: Work in process, beginning 12,500
Less: Work in process, Ending 14,250
Cost of Goods Manufactured $27,750
Hayward Company
Statement of Cost of Goods Sold
For the month Ended May 31
Finished goods, beginning $6,685
Add: Cost of Goods Manufactured 27,075
Cost of goods available for sale 33,760
Less: Finished goods, ending 4,250
Cost of goods sold $29,510
Explanation:
Cost of goods manufacture used to compute cost of goods manufacture for the period. It started from the raw materials beginning inventory then add the purchases of the raw materials including the handling cost to get the raw materials available. Then deduct the raw materials end to get the cost of raw material used for the period. Add direct labor to get the prime cost and then add manufacturing overhead to the prime cost to get the manufacturing cost. Lastly, add work in process beginning and deduct the work in process end to get the cost of goods manufactured.
In preparation of cost of goods sold, we start from the cost of goods manufactured we computed earlier and add the finished goods beginning to get the cost of goods available for sale. And from there we deduct the finished goods ending inventory to get the cost of goods sold for the period.
