Midterm Exam

1. Question : (TCO A) The following data (in thousands of dollars) have been taken from the accounting records of Larden Corporation for the just-completed year.

Sales $950

Purchases of raw materials $170

Direct labor $210

Manufacturing overhead $220

Administrative expenses $180

Selling expenses $140

Raw materials inventory, beginning $70

Raw materials inventory, ending $80

Work-in-process inventory, beginning $30

Work-in-process inventory, ending $20

Finished goods inventory, beginning $100

Finished goods inventory, ending $70

Required: Prepare a Schedule of Cost of Goods Manufactured statement in the text box below.

Student Answer: Schedule of Cost of Goods Manufactured for the Larden Corporation. Beginning Raw Materials Inventory $70 Add: Purchases of Raw Materials $170 Raw materials available for use= $240 Deduct:Ending Raw Materials Inventory $80 Raw Materials used in Production=$160 Direct Labor $210 Manufacturing Overhead $220 Total Manufacturing Costs $590 Add:Beginning Work in Process Inventory $30+$590=$620 Deduct:Ending Work in Process Inventory$20 COST OF GOODS MANUFACTURED=$600 Instructor Explanation: Schedule of Cost of Goods Manufactured for the Larden Corp.

Direct materials:

Beginning raw materials inventory $70
Add: purchases raw material 170
Raw materials available for use 240
Deduct ending raw materials 80
Raw materials used in production 160
Direct labor 210
Manufacturing overhead 220
Total manufacturing costs 590
Add beginning work-in-process inventory 30 620
Deduct ending work-in-process inventory 20
Cost Of goods