COST OF GOODS MANUFACTURED, COST IDENTIFICATION, SOLVING FOR UNKNOWNS
Skilz-Accountants Company creates, produces, and sells CD-ROM-based CA review courses for individual use. Jeretta Chan, head of human resources, is convinced that question development employees must have strong analytical and problem-solving skills. She has asked Terrell Slater, controller for Skilz-Accountants, to help develop problems for use in screening applicants before they are interviewed. One of the problems Terrell has developed is based on the following data for a mythical company for the previous year:
a. Conversion cost was $240,000 and was three times the prime cost.
b. Direct materials used in production equalled $45,000.
c. Cost of goods manufactured was $295,000.
d. Ending work in process is 20 percent of the cost of beginning work in process.
e. There are no beginning or ending inventories for direct materials.
f. Cost of goods sold was 80 percent of cost of goods manufactured.
g. Beginning finished goods inventory was $14,400.
Required:
1. Using the above information, prepare a cost of goods manufactured statement.
2. Using the above information, prepare a cost of goods sold statement.