Hello there, i need your help with this question. In 2021 company purchased direct raw material USD50,000, and direct labor cost USD21,000. Raw material opening 35,500 Raw material closing 12,900 Work in process opening 8,000 Work in proses closing 5,050 Finished goods Opening 7,075 Finished good Closing 6,475 Indirect Material 9,500 Indirect labor 7,450 Selling and administrative Expenses 3,370 Depreciation 1200 Utilities 1,100 Others 800 Prepare Cost of goods sold schedule for the company.
Here's something that always gets me with COGM calculations. We add the manufacturing costs like insurance, etc. but aren't we already expensing those items? It seems like double dipping.
Thank you so much but I am failing to interprete the additional information given to me when calculating my cost of goods manufactured. Let's say for instance I'm given $28600 as my water and electricity (30% is for water) with this additional information: During the year, the factory utilized 5 500 litres of water and 38 500 kilowatts of electricity while the office building utilized 2 750 litres and 11 000 kilowatts. The factory occupies 77% of the total property space. How do I interpret it and put everything on its rightful place
Hello Maria - Sorry for the late reply. You will need to allocate your costs to the office and factory. The factory costs will be included on the Cost of Goods Manufactured schedule.
Hello Thank you so much for your explanation and support. However, I have the same question but direct materials inventory are not given only direct material purchased. Also, work in process inventory are given but not specified beginning or end. So how can I solve it like that?
Hello Sandra - It could be that your class treats the items a bit differently. If you have direct materials purchased, and one of the inventories, you may be able to use the formula to back into the missing one, but you would need two of the items. Also, there is no way to know if the Work-in-Process you are given is beginning or ending unless you are told. Maybe there is more data somewhere else? Sorry I can't be of more help.
I'm not able to continue the actual video right now. But, if your overhead is overapplied, then you applied too much. So, reduce your COGS. (Depending on your class, you may need to reduce other accounts.) If it is underapplied, it is the opposite - add the underapplied amount to COGS. I hope that helps a bit!
Hello - Yes. Once you calculate your cost of goods manufactured, you would calculate cost of goods sold as: Beginning finished goods inventory + Cost of goods manufactured - ending finished goods inventory. I hope that helps!
Thank you so much! I have a question.What about administrative expenses, depreciation expense-manufacturing equipment, manufacturing supplies expense, sales and selling expense where is it included?
Hello Clarissa - Administrative expenses go on the income statement directly, not in cost of goods manufactured. The two manufacturing costs would be overhead. Sales and selling expenses also go on the income statement directly. I hope that helps!
Hi - It depends upon the nature of the repairs and maintenance. If they are occurring in the factory, they would be part of overhead. If they are for administrative or selling spaces, they would be period costs. I hope that helps!
Thank you so much for making this video! I have been struggling with this for two days!! I tried everything and nothing was working! This simplifies everything! Thank you!
Explained how to do this much better than my actual professor haha, this video was a godsend! Thank you so much!
I'm so glad you found it helpful! :)
Hello there, i need your help with this question. In 2021 company purchased direct raw material USD50,000, and direct labor cost USD21,000.
Raw material opening 35,500
Raw material closing 12,900
Work in process opening 8,000
Work in proses closing 5,050
Finished goods Opening 7,075
Finished good Closing 6,475
Indirect Material 9,500
Indirect labor 7,450
Selling and administrative Expenses 3,370
Depreciation 1200
Utilities 1,100
Others 800
Prepare Cost of goods sold schedule for the company.
Hello - I am not able to do this for you, but hopefully if you watch the video it will help you.
Thank you so much for making this video!
Thank you teacher
Very clear to the point video. Easy to understand and super helpful thank you
I’m so happy you found it helpful!
Love this my saviour
Here's something that always gets me with COGM calculations. We add the manufacturing costs like insurance, etc. but aren't we already expensing those items? It seems like double dipping.
estimate schedule of
skip to 1:15
Thank you so much for this. What do I do if beginning work in process is zero?
Thank you so much,
I am from Melbourne, studying Accounting. Your online videos are very helpful!
Rishikeshan Pangushan I’m so glad you find them helpful! Good luck with your studies.
Thank you for making my life easier!
So glad to be of help!
Thank you so much but I am failing to interprete the additional information given to me when calculating my cost of goods manufactured. Let's say for instance I'm given $28600 as my water and electricity (30% is for water) with this additional information: During the year, the factory utilized 5 500 litres of water and 38 500 kilowatts of electricity while the office building utilized 2 750 litres and 11 000 kilowatts. The
factory occupies 77% of the total property space.
How do I interpret it and put everything on its rightful place
Hello Maria - Sorry for the late reply. You will need to allocate your costs to the office and factory. The factory costs will be included on the Cost of Goods Manufactured schedule.
Hello Thank you so much for your explanation and support. However, I have the same question but direct materials inventory are not given only direct material purchased. Also, work in process inventory are given but not specified beginning or end. So how can I solve it like that?
Hello Sandra - It could be that your class treats the items a bit differently. If you have direct materials purchased, and one of the inventories, you may be able to use the formula to back into the missing one, but you would need two of the items. Also, there is no way to know if the Work-in-Process you are given is beginning or ending unless you are told. Maybe there is more data somewhere else? Sorry I can't be of more help.
❤
Ur a saint
Can you take this video one step further and add/deduct over/under applied overhead with adjusted cogs?
I'm not able to continue the actual video right now. But, if your overhead is overapplied, then you applied too much. So, reduce your COGS. (Depending on your class, you may need to reduce other accounts.) If it is underapplied, it is the opposite - add the underapplied amount to COGS. I hope that helps a bit!
massive help for me! thanks for making this!
would this be the same or similar to Preparing a schedule of cost of goods manufactured and sold
Hello - Yes. Once you calculate your cost of goods manufactured, you would calculate cost of goods sold as: Beginning finished goods inventory + Cost of goods manufactured - ending finished goods inventory. I hope that helps!
Your teaching style is brilliant thanku so much mam
Thank you so much! I have a question.What about administrative expenses, depreciation expense-manufacturing equipment, manufacturing supplies expense, sales and selling expense where is it included?
Hello Clarissa - Administrative expenses go on the income statement directly, not in cost of goods manufactured. The two manufacturing costs would be overhead. Sales and selling expenses also go on the income statement directly. I hope that helps!
Thank you! It helps me a lot.
What about repairs and maintenance? is it included in the manufactering overhead? or is it a period cost too and will not be calculated?
Hi - It depends upon the nature of the repairs and maintenance. If they are occurring in the factory, they would be part of overhead. If they are for administrative or selling spaces, they would be period costs. I hope that helps!
Thank you so much for very nicely explained the concept !
Glad you found it helpful!
This is one of the best explanations I’ve seen! Thank you!
Thank you Adrian! 😊
2020 and your video is still useful! thanks!!
Thank you! We need all the help we can get in 2020. :)
Thanks you helped me with my homework today :)
brina Floyd that’s great! So happy to help.
thank you
Thank you, very clear and concise teach.🙏🏾
I'm so glad you found it helpful! Happy New Year!
@@CarolynChristesen Happy New Year to you as well
Thank you!
Thank you so much tomorrow is my exam 😅
Muntasirul Hoque good luck!
Thank you so much for making this video! I have been struggling with this for two days!! I tried everything and nothing was working! This simplifies everything! Thank you!
I am so glad this helped you! Good luck with the rest of your studies.
Thank you so much, that was helpful.
I'm so glad you found this helpful! Best of luck with your studies, and happy 2018!