Question

Managerial Accounting

Given the following, prepare a cost of goods manufactured schedule and partial income statement. Refer to the

text for your format.

Raw materials inventory 1/1/16 5,900

Raw materials inventory 12/31/16 5,620

Finished goods inventory 1/1/16 8,600

Finished goods inventory 12/31/16 7,880

Factory insurance 740

Depreciation factory machinery 730

Utilities, factory 1,330

Utilities, office 860

Work in process inventory 1/1/16 950

Work in process inventory 12/31/16 800

Direct labor 14,510

Indirect labor 1,810

Plant manager’s salary 3,000

Property taxes, factory 610

Repairs, factory 80

Raw materials purchases 6,750

Sales 47,500

Answer 1

Answer with working notes and schedules is given below

Partial Income Statement For the year ended December 31, 2016 Amount $47,500 $30,710 As per working below $16,790 Sales Less: Cost of Goods Sold Gross profit Less: Operating expenses General and Administrative expenses Utilities Office Income (loss) before tax $860 $15,930 Working note : $7,030 $14,510 $21,540 Schedule of Cost of Goods Manufactured Direct Material Opening inventory of Raw Material $5,900 Add: purchases $6,750 Total Raw Material Available $12,650 Less: Closing inventory of Raw Material $5,620 Raw material used in production Direct Labor Prime Cost Factory overheads Factory insurance $740 Depreciation factory machinery Utilities $1,330 Indirect labor $1,810 Plant managers salary $3,000 Property taxes $610 Repairs Total factory overheads Total Manufacturing cost Add: Opening work in process inventory $730 $80 $8,300 $29,840 $950 $30,790 $800 $29,990 Less: Closing work in process inventory Cost of Goods Manufactured Schedule of Cost of Goods Sold Opening Finished Goods inventory Add: Cost of Goods manufactured Cost of Goods available for sale Less: Closing Finished Goods inventory Cost of Goods Sold $8,600 $29,990 As per working above $38,590 $7,880 $30,710