Cost Management: A Strategic Emphasis 5th Edition by David Stout, Edward Blocher, Gary Cokins

Exercise 56

Cost of Goods Manufactured and Sold Jordan Company produces women’s clothing. During 2010, the company incurred the following costs:

Factory rent	$425,000
Direct labor	325,000
Utilities—Factory	35,000
Purchases of direct materials	625,000
Indirect materials	70,000
Indirect labor	80,000

Inventories for the year were as follows:

	January 1	December 31
Direct materials	$30,000	$50,000
Work in process	60,000	25,000
Finished goods	115,000	95,000

Required

1. Prepare a statement of cost of goods manufactured.

2. Calculate cost of goods sold.

Step 1 of 5

Statement of cost of goods sold (COGS):

A COGS statement includes the greater detail of cost of goods sold of an accounting period which is typically found on income statement.