Task: Manufacturing information for 2001 for the Fossil Furniture Company is provided below.
On January 1, 2001, raw materials inventory included direct materials with a cost of $20,000. During the year, the firm purchased direct materials costing $50,000. At year-end, the account included direct materials, with a cost of $5,000.
During the year, work-in-process inventory was charged with direct labor, variable factory overhead, and fixed factory overhead costs totaling $90,000, $60,000, and $45,000, respectively.
Account balances were as follows:
Work-in-process inventory-
January1, 2001 $40,000
Work-in-process inventory-
December 31, 2001 $45,000
Finished Goods inventory-
January 1, 2001 $35,000
Finished Goods Inventory-
December 31, 2001 $50,000
Q1. Prepare a schedule of cost of goods manufactured for the year ended December 31, 2001. Assume an actual cost system.
Q2. Determine the amount of cost of goods sold.
Q3. Was cost of goods sold equal to, more than, or less than cost of goods manufactured for this year? Why?