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The following information is available for Shanika Company for 20Y6: Inventories January 1 December 31 Materials $457,760 $563,040 Work in process 823,970 765,730 Finished goods 791,920 782,630 Advertising expense $382,300 Depreciation expense-office equipment 54,050 Depreciation expense-factory equipment 72,630 Direct labor 867,080 Heat, light, and power-factory 28,720 Indirect labor 101,350 Materials purchased 850,190 Office salaries expense 296,720 Property taxes-factory 23,650 Property taxes-headquarters building 48,980 Rent expense-factory 39,980 Sales 3,980,690 Sales salaries expense 488,720 Supplies-factory 19,710 Miscellaneous costs-factory 12,390 Required: 1. Prepare the 20Y6 statement of cost of goods manufactured. Shanika Company Statement of Cost of Goods Manufactured For the Year Ended December 31, 20Y6

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Answer:

Shanika Company

Statement of Cost of Goods Manufactured For the Year Ended December 31, 20Y6:

Materials:

Beginning Inventory              $457,760

Purchases                                 850,190

Cost of materials available $1,307,950

Less Ending Inventory            563,040

Cost of materials used                          $744,910

Beginning Work in process                    823,970

Direct Labor                                            867,080

Factory Overhead                                  298,430

Less Ending Work in process               (765,730)

Cost of goods manufactured          $1,968,660

Explanation:

1) Data and Calculations:

a) Shanika Company for 20Y6:

Inventories          January 1     December 31

Materials               $457,760      $563,040

Work in process     823,970         765,730

Finished goods       791,920         782,630

Advertising expense $382,300

Depreciation expense-office equipment 54,050

Depreciation expense-factory equipment 72,630

Direct labor 867,080

Heat, light, and power-factory 28,720

Indirect labor 101,350

Materials purchased 850,190

Office salaries expense 296,720

Property taxes-factory 23,650

Property taxes-headquarters building 48,980

Rent expense-factory 39,980

Sales 3,980,690

Sales salaries expense 488,720

Supplies-factory 19,710

Miscellaneous costs-factory 12,390

b) Factory Overhead:

Depreciation expense       $72,630

Heat, light, and power         28,720

Indirect labor                       101,350  

Property taxes-factory        23,650

Rent expense-factory         39,980

Supplies-factory                    19,710

Miscellaneous costs            12,390

Total Factory overhead $298,430

c) The cost of goods manufactured is made up of the costs of materials, direct labor, work in process, and manufacturing overhead.

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