Question

2127667c-%2F%2F8 [LO 3-4 3-58 Cost of Goods Manufactured Income Statement Norton Industries, a manufacturer of cable for the heavy construction industry, closes its books and prepares financial statements at the end of cach month. The statement of cost of goods sold for April follows: NORTON INDUSTRIES Statement of Cost of Goods Sold For the Month Ended April 30 ($000 omitted) Finished Goods Inventory, March 31... Cost of goods manufactured Cost of goods available for sale Less: Finished Goods Inventory, April 30 Cost of goods sold $.50 790 $840 247 $593 Additional Information or the utilities, 80% relates to manufacturing the cable; the remaining 20% relates to the sales and administrative functions. All rent is for the office building. Property taxes are assessed on the manufacturing plant. of the insurance, 60% is related to manufacturing the cable: the remaining 40% is related to the sales and administrative functions. Depreciation expense includes the following: Manufacturing plant... Manufacturing equipment Office equipment $20,000 30,000 4.000 $54.000 The company manufactured 7.825 tons of cable during May. The inventory balances at May 31, follow • Materials Inventory $23.000 • Work-in-Process Inventory S220,000 • Finished Goods Inventory S175,000 LG MENU MY KEYIS RUNCH AUTOI NOUTO

Answer 1

Norton Industries
Statement of Cost of Goods Manufactured
For the Month Ended May 31
($000 omitted)
Direct materials
Inventory of direct materials, April 30	$       28.00
Purchase of direct materials	$     510.00
Freight-in	$       15.00
Total direct materials available for use	$     553.00
Inventory of direct materials, May 31	$       23.00
Direct materials used in production		$     530.00
Direct labor		$     260.00
Indirect factory labor	$       90.00
Utilities (135 x 80%)	$     108.00
Property tax	$       60.00
Insurance (20 x 60%)	$       12.00
Depreciation (20 + 30)	$       50.00
Manufacturing overhead		$     320.00
Total manufacturing costs		$  1,110.00
Add : Inventory of WIP April 30		$     150.00
Less:Inventory of WIP May 31		$   (220.00)
Cost of goods manufactured		$  1,040.00
b)
Norton Industries
Income Statement
For the Month Ended May 31
($000 omitted)
Sales	$  1,488.00
Less: Sales discounts	$       20.00
Net Sales		$  1,468.00
Cost of Goods Sold
Finished Goods Inventory, 4/30	$     247.00
Cost of Goods Manufactured	$  1,040.00
Cost of Goods Available for Sale	$  1,287.00
Finished Good Inventory, 5/31	$   (175.00)	$  1,112.00
Gross Margin		$     356.00
General, Selling, and Administrative Expense
Office Salaries	$     122.00
Sales Salaries	$       42.00
Insurance ($20 x 40%)	$         8.00
Utilities ($135 x 20%)	$       27.00
Rent	$         9.00
Depreciation	$         4.00
Interest	$         6.00	$     218.00
Income from operations		$     138.00
Other revenue		$         2.00
Net Income		$     140.00