Arthur Manufacturing Company Produces a Single Product

Essay

Arthur Manufacturing Company produces a single product.The controller has asked for your help in preparing a schedule of cost of goods manufactured for the month just ended.The following information is available:
1.)Eleven thousand units were sold at $22 per unit.
2.)Thirteen thousand units requiring one unit each of raw materials were produced.
3.)Raw materials inventory at the beginning of the month was 1,100 units at $4 each.
4.)During the month,two purchases of raw materials were made:
Purchase #1: 7,000 units at $5.00 each
Purchase #2: 6,000 units at $5.50 each
5.)The company uses the first-in,first-out method of determining raw materials inventories.
6.)The work-in-process inventories were:
Beginning of the month: 1,500 units valued at $17,000
End of the month: 1,500 units valued at $19,000
7.)Direct labour cost was $110,000.
8.)Overhead is applied to production on the basis of 65% of direct labour cost.
Required:
Prepare a schedule of cost of goods manufactured for the month.