Question

Financial Statements of a Manufacturing Firm The following events took place for Digital Vibe Manufacturing Company during January, the first month of its operations as a producer of digital video monitors: Purchased $50,400 of materials Used $38,800 of direct materials in production. Incurred $58,000 of direct labor wages. Incurred $81,600 of factory overhead. Transferred $135,600 of work in process to finished goods. Sold goods for $242,400. Sold goods with a cost of $107,900. Incurred $62,000 of selling expenses. Incurred $27,200 of administrative expense. Using the information given, complete the following: a. Prepare the January income statement for Digital Vibe Manufacturing Company. Digital Vibe Manufacturing Company Income Statement For the Month Ended January 31 $ $ Operating expenses: $ Total operating expenses $ b. Determine the Materials Inventory, Work in Process Inventory, and Finished Goods Inventory balances at the end of the first month of operations. Digital Vibe Manufacturing Company Inventory Balances For the Month Ended January 31 Inventory balances on January 31: Materials $ Work in process Finished goods

Answer 1

Working Note 1- Calculation of Material balance as of January 31 Material balance as of January 31 -Beginning material balance Material Purchases - Material Used S0+$50,400 - S38,800 - $11,600 Working Note 2 - Calculation of work-in process inventory balance as of January 31 $38,800 given in question Materials used Add: Direct labor wages incurred S58,000 given in question Add: Factory Overhead incurred = $81.600-) given in question Total manufacturing Cost = $178,400 Work-in process inventory transferred to finished goods $135,600 given in question Note: Work-in process inventory transferred to finished goods Cost of goods manufactured otal manufacturing cost Cost of Goods manufacturedEnding Work-in proccss inventory From the above formula, following formula can be derived: Ending Work-in process inventory balance Total manufacturing cost Cost of goods manufactured -$178,400 - $135,600 $42,800 Working Note 3- Calculation of finished goods inventory balance as of January 31 Work-in process inventory transferred to finished goods- S135,600 >given in question Note1: Work-in process inventory transferred to finished goods Cost of goods manufactured