COMPUTATION OF COST OF GOODS MANUFACTURED, COSTS OF GOODS

SOLD AND PREPARATION OF THE INCOME STATEMENT.

PREPARING A SCHEDULE OF COST OF GOODS MANUFACTURED.

The schedule of cost of goods manufactured contains the THREE elements of

product costs------> DM, DL & MOH. The formatof the schedule is presented as
follows:
Company X
Statement of Cost of Goods Manufactured
For the Year Ended 31 December 2019
RM RM
Direct Materials:
Beginning raw materials inventory xxx
Add: Purchase of raw materials xxx
Raw materials available for use xxx
Less: Ending raw materials inventory (xxx)
Raw materials used in production xxx
Direct Labor xxx
Manufacturing overhead (list all of the costs) xxx
Total current manufacturing cost xxx
Add: Beginning work in process xxx
Total cost of work in process xxx
Less: Ending work in process (xxx)
Cost of goods manufactured xxx

The amount of Cost of Goods Manufactured will be used to prepare an Income

Statement (Statement of Income and Loss and Other Comprehensive Income).
Company X
Statement of Income and Loss and Other Comprehensive Income
For the Year Ended 31 December 2019
RM RM
Sales xxx
Less: Cost of Goods Sold
Beginning finished goods xxx
Add: Cost of Goods Manufactured xxx
Cost of goods available for sale xxx
Less: Ending finished goods (xxx)
Cost of Goods Sold (xxx)
Gross Margin xxx
Less: operating expenses
Selling and administrative expenses
(list all of the cost) (xxx)
Net Income xxx

EXAMPLE:
Using the following data, prepare a schedule of cost of goods manufactured.
RM
Lubricants for machine 4,500
Rent, factory building 16,000
Direct labor 90,000
Indirect materials 2,000
Sales commissions 24,000
Factory utilities 5,800
Insurance, factory 2,000
Purchase of raw materials 120,000
Work in process, beginning 16,000
Work in process, ending 11,500
Raw materials, beginning 15,000
Raw materials, ending 5,000
Depreciation of office equipment 4,000
Solutions
Company X
Statement of Cost of Goods Manufactured
For the Year Ended 31 December 2019
RM RM
Direct Materials:
Beginning raw materials inventory 15,000
Add: Purchase of raw materials 120,000
Raw materials available for use 135,000
Less: Ending raw materials inventory 5,000
Raw materials used in production 130,000
Direct Labor 90,000
Manufacturing overhead (list all of the costs)
Lubricants for machine 4,500
Rent, factory building 16,000
Indirect materials 2,000
Factory utilities 5,800
Insurance, factory 2,000
Total overhead cost 30,300
Total current manufacturing cost 250,300
Add: Beginning work in process 16,000
Total cost of work in process 266,300
Less: Ending work in process (11,500)
Cost of goods manufactured 254,800