Wilmington Chemical Company uses oil to produce two types of plastic products, P1 and P2.

Wilmington budgeted 15,200 barrels of oil for purchase in June for $70 per barrel. Direct labor budgeted in the chemical process was $138,300 for June. Factory overhead was budgeted $191,500 during June. The inventories on June 1 were estimated to be:

Oil $9,700

P1 6,500

P2 5,500

Work in process 8,000

The desired inventories on June 30 were:

Oil $10,600

P1 5,900

P2 5,300

Work in process 8,300

Use the preceding information, cost of goods sold budget for June.

Wilmington Chemical Company

Cost of Goods Sold Budget

For the Month Ending June 30 

$

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 $

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Direct materials: 

$

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 $

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 $

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 $

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Answers:

Cost of goods sold Budget

For the month ending June 30

Finished goods inventory, June 12,000

Work in process inventory, June 8,000

Direct materials:

Direct materials inventory, June 9,700

Direct materials purchases 1,064,000

Cost of direct materials available for use 1,073,700

Less: Direct materials inventory, June 30 10,600

Cost of direct materials placed in production 1,063,100

Direct labor 138,300

Factory Overhead 191,500

Total manufacturing costs 1,392,900

Total work in process during the period 1,400,900

Less: Work in process inventory, June 30 8,300

Cost of goods manufactured 1,392,600

Cost of finished goods available for sale 1,404,600

Less: Finished goods inventory, June 30 11,200

Cost of goods sold 1,393,400

Step-by-step explanation

Calculations:

Cost of goods sold Budget

For the month ending June 30

Finished goods inventory, June 12,000 = 6,500+5,500

Work in process inventory, June 8,000

Direct materials:

Direct materials inventory, June 9,700

Direct materials purchases 1,064,000 = (15,200 x 70)

Cost of direct materials available for use 1,073,700 = (1,064,000 + 9,700)

Less: Direct materials inventory, June 30 10,600

Cost of direct materials placed in production 1,063,100 = (1,073,700 - 10,600)

Direct labor 138,300

Factory Overhead 191,500

Total manufacturing costs 1,392,900 = (1,063,100 + 138,300 + 191,500)

Total work in process during the period 1,400,900 = (1,392,000 + 8,000)

Less: Work in process inventory, June 30 8,300

Cost of goods manufactured 1,392,600

Cost of finished goods available for sale 1,404,600 = (1,392,600 + 8,300)

Less: Finished goods inventory, June 30 11,200 = (5,900 + 5,300)

Cost of goods sold 1,393,400 = (1,404,600 -11,200)