Question

The following information pertains to Franklin Manufacturing Company for March Year 3.

Assume actual overhead equaled applied overhead.

March 1

Inventory balances

Raw materials $ 124,500

Work in process 119,600

Finished goods 77,100

March 31

Inventory balances

Raw materials $ 86,500

Work in process 145,500

Finished goods 80,100

During March Costs of raw materials purchased $ 118,300

Costs of direct labor 100,100

Costs of manufacturing overhead 62,500

Sales revenues 356,000

1. Prepare a schedule of cost of goods manufactured and sold.

2. Calculate the amount of gross margin on the income statement.

1.

	FRANKLIN MANUFACTURING COMPANY Schedule of Cost of Goods Manufactured and Sold For March Year 3 Raw materials available for use 0 Direct raw materials used 0 Total manufacturing costs 0 Total work in process inventory 0 Cost of goods manufactured 0 Cost of goods available for sale 0 Cost of goods sold $0

B

Gross Margin:

Answer 1

1.

FRANKLIN MANUFACTURING COMPANY Schedule of Cost of Goods Manufactured and Sold For March Year 3 Beginning raw material 124500 Raw material purchase 118300 Raw materials available for use 242800 Less; Ending raw material -86500 Direct raw materials used 156300 Direct labor 100100 Manufacturing overhead 62500 Total manufacturing costs 318900 Beginning work in process 119600 Total work in process inventory 438500 Less: Ending work in process -145500 Cost of goods manufactured 293000 Beginning finished goods 77100 Cost of goods available for sale 370100 Less: Ending finished goods -80100 Cost of goods sold $290000

Gross profit = 356000-290000 = $66000