Delaware Chemical Company uses oil to produce two types of plastic products, P1 and P2. Delaware budgeted 35,000 barrels of oil for purchase in June for $90 per barrel. Direct labor budgeted in the chemical process was $240,000 for June. Factory overhead was budgeted at $400,000 during June. The inventories on June 1 were estimated to be:

Oil $15,200
P1 8,300
P2 8,600
Work in process 12,900

The desired inventories on June 30 were:

Oil $16,100
P1 9,400
P2 7,900
Work in process 13,500

Required:
Use the preceding information to prepare a cost of goods sold budget for June 2015.

Question

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akiran007 akiran007 · Answer 1 · 2020-05-12T03:32:41+02:00

Answer:

Cost Of Goods Sold $ 3788,100

Explanation:

Delaware Chemical Company

Cost of Goods Sold Budget

For June 2015.

Direct Materials Opening Inventory $ 15200

Add Purchases (35,000barrels *$90 per barrel) $ 3150,000

Less Direct Materials Closing Inventory $ 16100

Direct Materials used $ 3149,100

Direct labor $240,000

Factory overhead $400,000

Total Manufacturing Costs $ 3789,100

Add Opening Work in process 12,900

Cost Of Goods Available For Manufacture 3802,000

Less Ending Work in process 13,500

Cost Of Goods Manufactured 3788,500

Add Finished Goods Opening Inventory 16900

Cost of Goods Available for Sale 3805,400

Less Finished Goods Ending Inventory 17,300

Cost Of Goods Sold $ 3788,100

Calculations

Finished Goods Opening Inventory

P1+ P2= 8300 + 8600= 16900

Finished Goods Ending Inventory

P1+P2= 9400+ 7900= 17,300

We calculate the cost of Goods sold by putting the values in the above format.