 That will give us the total factory overhead. So we're gonna have total factory overhead and select tab tab I'm gonna pull that over to the outside. We're gonna sum these two numbers up We're just adding up to 78 111 and the 63,000. I'm just gonna sum those up like this Some those two items so those added together I'm gonna indent this one more time if you're wondering how these are indented when they're in The same cell or the same column you go up to the home tab you go up to this and you indent So we're saying this is what we're gonna calculate here. It is indented here. It is having been calculated We do not indent direct labor because it's already it's just one number in the outer column We could also underline these if we wanted to go on here and go into the home tab font Underline and underline here going to the home tab font and underline in this way as well That'll give us our total manufacturing cost so total manufacturing cost I'm gonna tab that all the way out to the end and we actually do not like triple You know indent this one We're gonna bring it back to the base in this case and we're gonna add up only the outer column the column We only add up one column at a time So that's of course gonna include the direct materials the direct labor and the factory overhead that we have calculated So that's gonna equal the sum of this direct materials direct labor and the factory overhead and Enter now we don't have any work in process because this is basically kind of a simplified problem in that we're saying That whatever we produce is we're gonna produce in that time period We're not gonna have anything left over in the production process. We're gonna start it We're gonna complete it in the same time period So I'll just put in the work in process here just so you can see how that would be in here So here we have the work in process at the beginning once again We would get that from of course that the balance sheet up here But there is no work in process notice we have raw materials and finished goods What that indicates is that it's a very fairly quick process to Manufacture and therefore we're not caught at the end with it with a lot of stuff that's within the processing time That it's basically being we start it we complete it And so we have zero work in process if there was work in process, of course At the beginning we would have to account for that and then we're gonna say that's gonna be the total manufacturing cost plus What was in beginning work in process and then we would have to take out what is still in the work in process The stuff that's not done yet stuff not yet in Indian inventory once again, we're saying it's zero in this problem There's nothing that has not been completed. We're gonna complete it within the time period So that's gonna be this it would be this minus this so we got the Cost of goods manufactured will then be this one million one eighty seven six eighty five The next piece we want to take a look at that will need for the income statement is to calculate the cost of goods sold We're gonna need this number instead of having purchases as we would have if we just purchased the inventory We have in replacing that in the calculation cost gets sold this number being the cost of goods Manufactured so let's plug this into the cost of goods sold formula We start cost goods sold out with the beginning finished goods inventory Just like we would if we bought the inventory same process although we are manufactured in this process beginning finished goods inventory Is going to be whatever is on the balance sheet of course up here So we're gonna go up to a balance sheet and we say what did we start with in finished goods inventory this 325 540 so three two five five four zero is what we have and Then we're gonna add to that what are we gonna add to it what we just calculated up here the cost of goods Manufactured instead of purchases if we were in a purchasing company We just bought and sold inventory would be purchases of course but now we had to do this whole worksheet so that we can figure out the Stuff that we turn from raw material into inventory through our labor through our overhead And of course the raw materials and then we're gonna say less the ending finished goods inventory So we have the ending finished goods inventory What do we have still in finished goods at the end and that's going to equal? I'm gonna say equals and we're gonna go up to the production up here And we saw our budget and we have the production. We're gonna say that the Less the beginning the ending finished goods inventory is right here. So budgeted ending finished goods, but that's in units That's in units and remember they told us over here on this that we have the production cost per unit We're gonna say that per unit it costs 1950 $19.50 so we're gonna take the units at the end multiply that times $19.50 and so that's what we're gonna have less the ending inventory So now we're allocating that to this the portion that is still left over in Indian inventory. Here's what we started with Here's what we purchased. Here's I mean, here's what we made manufactured. Here's what we say is still left So now we're gonna do the calculation for the cost of goods sold cost of goods Sold then is going to equal the beginning inventory plus what we manufactured Minus what's still in there. That's what we have actually sold at this time