Cost of Goods Manufactured Schedule
A Cost of Goods Manufactured Schedule is a report that breaks down and calculates the total cost involved in manufacturing products during a specific period. It is used in managerial accounting to track and control costs.
Here’s a general outline of how a Cost of Goods Manufactured Schedule might be structured:
- Direct Materials:
- Begin with the beginning raw materials inventory.
- Add the cost of raw materials purchased.
- Subtract the ending raw materials inventory.
- This gives you the cost of direct materials used in production.
- Direct Labor:
- This is often simply given as a total cost for the period.
- Manufacturing Overhead:
- This may include a variety of costs such as indirect materials, indirect labor, depreciation on factory equipment, utilities for the factory, etc.
- Total Manufacturing Costs:
- Add up the direct materials used, direct labor, and manufacturing overhead. This gives you the total manufacturing costs for the period.
- Work in Process:
- Begin with the beginning work in process inventory.
- Add the total manufacturing costs from step 4.
- Subtract the ending work in process inventory.
- Cost of Goods Manufactured:
- The resulting figure from step 5 is the Cost of Goods Manufactured. This is the total cost of all goods that were finished during the period.
Remember, the Cost of Goods Manufactured Schedule is a key part of understanding the cost flow in a manufacturing company and plays an integral role in preparing an income statement for such businesses.
Example of a Cost of Goods Manufactured Schedule
Let’s construct a Cost of Goods Manufactured Schedule for a hypothetical manufacturing company. We’ll use the following data:
- Beginning Raw Materials Inventory: $20,000
- Raw Materials Purchased: $80,000
- Ending Raw Materials Inventory: $15,000
- Direct Labor: $100,000
- Manufacturing Overhead: $50,000
- Beginning Work in Process Inventory: $25,000
- Ending Work in Process Inventory: $30,000
The Cost of Goods Manufactured Schedule would look something like this:
Direct Materials:
- Beginning Raw Materials Inventory: $20,000
- Add: Raw Materials Purchased: $80,000
- Less: Ending Raw Materials Inventory: $15,000
- Cost of Direct Materials Used: $85,000
Direct Labor:
- Cost of Direct Labor: $100,000
Manufacturing Overhead:
- Cost of Manufacturing Overhead: $50,000
Total Manufacturing Costs:
- Total Manufacturing Costs (Direct Materials + Direct Labor + Manufacturing Overhead): $85,000 + $100,000 + $50,000 = $235,000
Work in Process:
- Beginning Work in Process Inventory: $25,000
- Add: Total Manufacturing Costs: $235,000
- Less: Ending Work in Process Inventory: $30,000
- Cost of Goods Manufactured: $230,000
So, in this example, the Cost of Goods Manufactured during the period is $230,000. This means it cost the company $230,000 to manufacture all the goods that were completed during the period.
