ACCT 2102 1st Edition Lecture 6 Outline of Last Lecture I Review II Income Statements III Calculating COGS for a Merchandiser Outline of Current Lecture IV Schedule for Calculating the COGS V Example Current Lecture Building Blocks of Managerial Accounting Chapter 2 Part 4 IV Schedule for Calculating the COGS Memorize This Raw Materials Beginning Inventory Raw Materials Purchased Raw Materials Ending Inventory Raw Materials Used Direct Materials Direct Labor Manufacturing Overhead Total Manufacturing Costs Work in Process Beginning Inventory Work in Process Ending Inventory Costs of Goods Manufactured Finished Goods Beginning Inventory Finished Goods Ending Inventory Costs of Goods Sold V Beg RM P End RM RM used DM DL MOH Tot Manu Costs BWIP EWIP COGM BFG EFG COGS Example Pine Tree Products extracted the following information from their prior year records Direct materials purchased 175 000 Direct labor used 254 000 Indirect labor used 109 000 Selling and Administrative salaries 133 000 These notes represent a detailed interpretation of the professor s lecture GradeBuddy is best used as a supplement to your own notes not as a substitute Building depreciation utilities and property tax 80 000 Other selling and administrative expenses 195 000 Other factory costs 344 000 Sales revenue 1 495 000 75 of square footage devoted to production 25 administrative offices Box 2 January 1 December 31 Raw Materials Inventory 15 800 18 200 Work in Process Inventory 35 700 62 100 Finished Goods Inventory 111 100 97 900 Calculate the Gross Profit and Operating Income for Pine Tree Beg RM P End RM RM used DM DL MOH Tot Manu Costs BWIP EWIP COGM BFG EFG COGS 15 800 175 000 18 200 172 600 254 000 109 000 60 000 344 000 936 000 35 7000 62 100 913 200 111 100 97 900 926 400 MOH Indirect Labor Used building depreciation utilities property tax other factory costs Building depreciation utilities property tax 75 x 80 000 60 000 Calculate Gross Profit SR COGS GP Op Exp Op y 1 495 000 price x units sold 926 4000 568 600 133 000 20 000 195 000 220 600 Operating expense Admin Salaries Bldg Dep Utilities property tax Admin Expense Building depreciation utilities property tax 25 x 80 000 20 000 Box 2 doesn t give beginning or ending balances it gives net change instead January 1 December 31 Net Change Raw Materials Inventory 15 800 18 200 increase 2 400 Work in Process Inventory 35 700 62 100 increase 26 400 Finished Goods Inventory 111 100 97 900 decrease 13 200 If the above box is given calculate COGS Beg RM P End RM RM used DM DL MOH Tot Manu Costs BWIP EWIP COGM BFG EFG COGS 0 made up number 175 000 2 400 given 172 600 254 000 109 000 60 000 344 000 936 000 0 made up number 26 400 given 913 200 13 200 given 0 made up number 926 400 Increase in account start with 0 and end with increase ex RM WIP Decrease in account start with decrease and end with 0 ex FG
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