Delaware Chemical Company uses oil to produce two types of plastic products, P1 and P2. Delaware budgeted 35,000 barrels of oil

Delaware Chemical Company uses oil to produce two types of plastic products, P1 and P2. Delaware budgeted 35,000 barrels of oil for purchase in June for $90 per barrel. Direct labor budgeted in the chemical process was $240,000 for June. Factory overhead was budgeted $400,000 during June. The inventories on June 1 were estimated to be:















Oil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $15,200
P1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,300
P2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,600
Work in process . . . . . . . . . . . . . . . . . . . . . . . . 12,900
The desired inventories on June 30 were:
Oil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $16,100
P1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,400
P2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,900
Work in process . . . . . . . . . . . . . . . . . . . . . . . . . 13,500




Use the preceding information to prepare a cost of goods sold budget for June 2015.


Answer:

                                                                              






















DELAWARE CHEMICAL COMPANY
Cost of Goods Sold Budget
For the Month Ending June 30, 2015
Finished goods inventory, June 11 $ 16,900
Work in process inventory, June 1 $ 12,900
Direct materials:
Direct materials inventory, June 1 $ 15,200
Direct materials purchases2 3,150,000
Cost of direct materials available for use $3,165,200
Less direct materials inventory, June 30 16,100
Cost of direct materials placed in
production $3,149,100
Direct labor 240,000
Factory overhead 400,000
Total manufacturing costs 3,789,100
Total work in process during the period $3,802,000
Less work in process inventory, June 30 13,500
Cost of goods manufactured 3,788,500
Cost of finished goods available for sale $3,805,400
Less finished goods inventory, June 303 17,300
Cost of goods sold $3,788,100
1 $8,300 + $8,600
2 35,000 barrels × $90 per barrel
3 $9,400 + $7,900