The cost of Goods manufactured schedule

The cost of goods manufactured schedule is used to calcualte the cost of producing products for a period of time. The cost of goods manufactured amount is transferred to the finished goods inventory account during the period and is used in calculating cost of goods sold on the income statement. The cost of goods manufactured schedule reports the total manufacturing costs for the period that were added to work in process, and adjusts these costs for the change in the work in process inventory account to calculate the cost of goods manufactured.

Red car, Inc. cost of Goods Manufactured schedule For the year Ended december 31,20X0

Direct material used

Beginning raw material inventory 6,200

Add: cost of raw material purchased 49,400

Total raw material available 55,600

Less: Ending raw material inventory (5,800)

Total raw material used 49,800

Direct labor 125,600

Manufacturing overhead

Indirect materials 4,100

Indirect labor 43,700

Depreciation-factory building 9,500

Depreciation-factory equipment 5,400

Insurance- factory 12,000

Property taxes- factory 4,500

Total manufacturing overhead 79,200

Total manufacturing costs 254,600

Add: Beginning work in process inventory 10,20

264,800

Less: Ending work in progress inventory (9,800)

Cost of goods manufactured $ 255,000

The cost of goods manufactured for the period is added to the finished goods inventory. To calculate the cost of goods sold, the change in finished goods inventory is added to/subtracted from the cost of goods manufactured.

Red car, Inc. Income statement For the year Ended December 31,20X0

Sales 427,000

Cost of goods sold

Beginning finished goods inventory 14,500

Cost of goods manufactured 255,000

Total goods available for sale 269,500

Ending finished goods inventory (12,600)

Cost of goods sold 256,900

Gross profit 170,100

Operating expenses

Selling expenses

Sales salaries 65,300

Depreciation-sales equipment 21,000

Total selling expenses 86,300

Administrative expenses

Office salaries 35,000

Depreciation-office equipment 12,000

Insurance expense 9,000

Office supplies expense 2,400

Total administrative expenses 58,400

Total operating expenses 144,700

Income from operations 25,400

Interest revenue 5,100

Income before taxes 30,500

Income taxes 10,675

Net Income $19,825

Required: Need to prepare cycle of inventory by T-account for Direct Material, Work in progress, Finished Goods and then the income statement