Sheldon Company reported the following information for the current year:

Ending goods in process P 1,000,000

Depreciation on factory building 320,000
Beginning raw materials 400,000
Direct labor 1,980,000
Factory supervisor’s salary 560,000
Depreciation on headquarters building 210,000
Beginning goods in process 760,000
Ending raw materials 340,000
Indirect labor 360,000
Purchases of raw materials 2,300,000

What is the cost of goods manufactured for the current year?

a. P 5,340,000 c. P 5,550,000
b. P 5,580,000 d. P 5,820,000
Solution:

Beginning raw materials 400,000

Purchases 2,300,000
Raw materials available for use 2,700,000
Ending raw materials (340,000)
Raw materials used 2,360,000
Direct labor 1.980,000
Factory overhead:
Depreciation on factory building 320,000
Factory supervisor's salary 560,000
Indirect labor 360,000 1,240,000
Total manufacturing cost 5,580,000
Beginning goods in process 760,000
Total goods in process 6,340,000
Ending goods in process (1,000,000)
Cost of goods manufactured 5,340,000