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Cost Accounting

The Cost of Goods Sold statement outlines the costs associated with raw materials, direct labor, and factory overhead over the years 2019 to 2021, showing a trend in manufacturing costs and gross margins. The document also includes a horizontal analysis of material consumed, indicating a decrease in 2020 followed by an increase in 2021. Additionally, it provides gross margin calculations and the cost of goods sold as a percentage of sales for each year.

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Samra Khalid 588
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15 views4 pages

Cost Accounting

The Cost of Goods Sold statement outlines the costs associated with raw materials, direct labor, and factory overhead over the years 2019 to 2021, showing a trend in manufacturing costs and gross margins. The document also includes a horizontal analysis of material consumed, indicating a decrease in 2020 followed by an increase in 2021. Additionally, it provides gross margin calculations and the cost of goods sold as a percentage of sales for each year.

Uploaded by

Samra Khalid 588
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd

Cost of Goods sold statement

COST OF GOODS SOLD STATEMENT : 2019 2020 2021


Raw material used 53,336,672 45,987,292 56,873,417

Add: Direct labor 6,566,564 7,218,329 8,393,412

= Prime cost 59,903,236 53,205,621 65,266,838

Add: Factory overhead (F.O.H) 20,008,957 20,125,738 21,847,973

= Factory Manufacturing cost 79,912,193 73,331,359 87,114,811

Add: Opening inventory of (WIP) 2,517,792 2,218,560 2,244,439

= Cost of material available for manufacture 82,429,958 75,549,919 89,359,250

Less: Closing inventory of (WIP) 2,218,560 2,244,439 3,044,441

= Cost of goods manufactured 80,211,425 73,305,480 86,314,809

Add: opening inventory of finish goods 5,807,366 6,909,811 9,393,252

= Cost of goods available for sale 86,018,791 80,215,291 95,708,061


Less: Ending inventories of finish goods 6,909,811 9,393,252 9,641,809

= COST OF GOODS SOLD 79,108,980 70,822,039 86,066,252


Conversion cost

(D.L + F.O.H)
2019: 6,566,564 + 20,008,957 = 26,575,521
2020: 7,218,329 + 20,125,738 = 27,344,067
2021: 8,393,421 + 21,847,973 = 30,241,394
HORIZONTAL ANALYSIS

Material Consumed:
2019: 53,336,672
Formula = base – current ×
100
Base

= 45,987,292 – 53,336,672
45,987,292
-15.9% Decrease

2020:
Formula = base – current × 100
Base

= 56,873,417 – 45,987,292
56,873,417
= 19.1% Increase
GROSS MARGIN

2019 96,005,322 – 79,108,980 16,896,342

2020 88,709,830 – 70,822,039 17,887,791

2021 104,727,458 – 86,066,252 18,661,206

CGS × 100
Sales

2019: = 79,108,980 × 100


96,005,322
= 82.4%

2020: = 70,822,039 *100


88,709,830
=79.8%

2021: = 86,066,252*100
104,727,458

=82.1%

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