Question

3. value: 10.00 points Swift Company was organized on March 1 of the current year. After five months of startup losses, management had expected to earn a profit during August, the most recent month. Management was disappointed, however, when the income statement for August also showed a loss. August's income statement follows: $ 495,000 SWIFT COMPANY Income Statement For the Month Ended August 31 Sales Less: Operating expenses: Indirect labour cost $ 14,700 Utilities 16,000 Direct labour cost 61,000 Depreciation, factory equipment 24,000 Raw materials purchased 192,000 Depreciation, sales equipment 18,000 Insurance 3,600 Rent on facilities 48,000 Selling and administrative salaries 41,000 Advertising 86,700 505,000 Net loss $ (10,000) The company's controller resigned a month ago. Sam, a new assistant in the controller's office, prepared

Answer 1

Swift Company Schedule of Cost of Goods Manufactured For The Month ended August 31 Direct Material :- Beginning Inventory of Raw Material Material purchased 25,000 $ 192,000 $ 217,000 Add Raw material Available for use Ending Inventory of Raw Material Direct Material used in production less 22,000 195,000 Direct Labor 61,000 Manufacturing Overhead : Indirect Labor Cost 14,700 Utilities 16000 x 70 % 11.200 Depriciation - Factory Equipment 24,000 Insurance 2,520 3600 x 70% Rent Expense - Factory building Total Factory Overhead cost 36,000 48000 x 75% 88,420 Total Manufacturing cost 2$ 344,420 | DM + DL + OH Add Beginning Work in Process 8,000 2$ Total Cost Work in Process 352,420 Ending Work in Process Cost of Goods Manufactured less 23,000 329,420 Swift Company Income Statement For The Month ended August 31 2$ 495,000 Net Sales Cost of Goods Sold :- Beginning Inventory of Finished Goods 48,000 $ 329,420 $ 377,420 Add Cost of Goods Manufactured Cost of Goods available for Sale 2$ Ending Inventory of Finished Goods 53,000 Less 324,420 Cost of Goods Sold Gross Profit 170,580 Sales - COGS Less: Operating Expenses:- 2$ 16000 x 30% Utilities 4,800 Depreciation, Sales Equipment 24 18,000 2$ 3600 x 30% 48000 x 25% Insurance 1,080 Rent expense Selling space 12,000 Selling & administrative Salaries 41,000 Advertising 86,700 Total operating Expense Net Operating Income 163,580 7,000