Cost Of Goods Sold And Manufacturing Costs At Debony Company

Question

Cost Of Gods Sold Cost Of Goods Manufacturedebony Company Has The Fol Cost of goods sold and cost of goods manufactured are fundamental components of financial reporting in manufacturing firms. Understanding these concepts allows a company to evaluate its production efficiencies and profitability. Debony Company provided specific data for July, including direct materials used, direct labor, factory overhead, work-in-process inventories, and finished goods inventories. The assignment requires calculating the cost of goods manufactured (COGM) and the cost of goods sold (COGS). Additionally, the task involves preparing a statement of COGM and a statement of COGS based on the provided data. Grasping these calculations is essential for accurately reporting a company's manufacturing costs and understanding its financial health in accordance with accounting principles.

Dr. Jack HW Helper · Accepted Answer

Introduction Understanding manufacturing costs is essential for assessing a company's operational efficiency and financial performance. The calculation of the cost of goods manufactured (COGM) and the cost of goods sold (COGS) provides critical insights into production expenses and inventory management. This paper discusses the calculation process for Debony Company’s July data, with emphasis on preparing accurate statements for both COGM and COGS, which are vital for managerial decision-making and financial reporting. Calculation of Cost of Goods Manufactured The cost of goods manufactured represents the total manufacturing costs incurred during a period, adjusted by the work-in-process (WIP) inventories beginning and ending balances. The formula for COGM is: COGM = Direct Materials Used + Direct Labor + Manufacturing Overhead + Beginning WIP Inventory - Ending WIP Inventory Given data: - Direct materials used: $67,200 - Direct labor: $88,000 - Factory overhead: $44,800 - Work-in-process inventory, July (assumed beginning and ending, if not provided, assume zero or specify as needed) Assuming beginning WIP inventory was zero and ending WIP inventory is provided as part of the data (for illustrative purposes, suppose ending WIP is $10,000), then: COGM = 67,200 + 88,000 + 44,800 + 0 - 10,000 = $190,000 Preparation of the Statement of Cost of Goods Manufactured Debony Company For the Month Ended July Direct Materials Used $67,200 Direct Labour $88,000 Factory Overhead $44,800 Work in Process Inventory, Beginning $0 Work in Process Inventory, Ending $10,000 Total Manufacturing Costs Incurred $200,000 Cost of Goods Manufactured $190,000 Calculation of Cost of Goods Sold The COGS formula is: COGS = Beginning Finished Goods Inventory + Cost of Goods Manufactured - Ending Finished Goods Inventory Suppose the beginning finished goods inventory was $20,000 and the ending finished goods inventory was $25,000. Then: COGS = 20,000 + 190,000 - 25,000 = $185,000 Preparation of th

Cost Of Goods Sold And Manufacturing Costs At Debony Company

Cost Of Gods Sold Cost Of Goods Manufacturedebony Company Has The Fol

Paper For Above instruction

Introduction

Calculation of Cost of Goods Manufactured

Preparation of the Statement of Cost of Goods Manufactured

Calculation of Cost of Goods Sold

Preparation of the Statement of Cost of Goods Sold

Conclusion

References

Debony Company	For the Month Ended July
Direct Materials Used	$67,200
Direct Labour	$88,000
Factory Overhead	$44,800
Work in Process Inventory, Beginning	$0
Work in Process Inventory, Ending	$10,000
Total Manufacturing Costs Incurred	$200,000
Cost of Goods Manufactured	$190,000

Debony Company	For the Month Ended July
Beginning Finished Goods Inventory	$20,000
Add: Cost of Goods Manufactured	$190,000
Cost of Goods Available for Sale	$210,000
Less: Ending Finished Goods Inventory	$25,000
Cost of Goods Sold	$185,000