Hill Company has the following information for January:

Hill Company has the following information for January:

Cost of direct materials used in production $16,800
Direct labor 43,400
Factory overhead28,000
Work in process inventory, January 1 70,000
Work in process inventory, January 31 74,200
Finished goods inventory, January 1 29,400
Finished goods inventory, January 31 33,600

For January, determine (a) the cost of goods manufactured and (b) the cost of goods sold.

Answer:

a. Work in process inventory, January 1……………………………… 
Cost of direct materials used in production……………………… 

$16,800 
$  70,000 
 Direct labor……………………………………………………………… 43,400  
 Factory overhead………………………………………………………   28,000  
 Total manufacturing costs incurred during January……………      88,200 
 Total manufacturing costs…………………………………………  $158,200 
 Less work in process inventory, January 31………………………      74,200 
 Cost of goods manufactured…………………………………………  $  84,000 
b. Finished goods inventory, January 1………………………………  $  29,400 
 Cost of goods manufactured…………………………………………      84,000 
 Cost of finished goods available for sale…………………………  $113,400 
 Less finished goods inventory, January 31………………………      33,600 
 Cost of goods sold……………………………………………………  $  79,800