Timbuk 3 Company has the following information for March:

Cost of direct materials used in production $37,000

Direct labor 50,000

Factory overhead 29,000

Work in process inventory, March 1 30,000

Work in process inventory, March 31 37,960

Finished goods inventory, March 1 26,000

Finished goods inventory, March 31 16,000

For the month of March, determine:

a. cost of goods manufactured

b. cost of goods sold

a. $108,040

b. $118,040

Explanation:

The computation is shown below:

a. For cost of goods manufactured, it is

= Direct materials used + Direct labor cost + Manufacturing overhead cost + beginning work-in-process inventory - ending work-in-process inventory

= $37,000 + $50,000 + $29,000 + $30,000 - $37,960

= $108,040

b. And, the cost of goods sold is

= Beginning finished Inventory + Cost of goods manufactured - Ending finished Inventory

= $26,000 + $108,040 - $16,000

= $118,040

We simply applied the above formulas