Question

StorSmart Company makes plastic organizing bins. The company has the following inventory balances at the beginning and end of March: Raw materials Work in process Finished goods Beginning Inventory $ 28,300 22,400 78,100 Ending Inventory $26,800 46,200 69,500 Additional information for the month of March follows: Raw materials purchases Indirect materials used Direct labor Manufacturing overhead applied Selling, general, and administrative expenses Sales revenue $ 41,000 1,700 63,900 36,600 24,100 237,900 Required: 1. Based on the above information, prepare a cost of goods manufactured report. 2. Based on the above information, prepare an income statement for the month of March.

Answer 1

1	STORSMART COMPANY
	Cost of Goods Manufactured Report
	For the Month of March
	Beginning inventory of Raw Materials	28300
	Add: Raw Materials purchased	41000
	Total Raw Materials available	69300
	Less: Ending inventory of Raw Materials	26800
	Raw Materials Used in Production	42500
	Less: Indirect materials used	1700
	Direct materials used		40800
	Direct Labour		63900
	Manufacturing overheads applied		36600
	Total Manufacturing Costs		141300
	Add: Beginning Work in Process inventory		22400
	Total Work in Process		163700
	Less: Ending Work in Process inventory		46200
	Cost of Goods Manufactured		117500
2	STORSMART COMPANY
	Income Statement
	For the Month of March
	Sales revenue		237900
	Less: Cost of Goods Sold
	Cost of Goods Manufactured	117500
	Add: Beginning Finished Goods inventory	78100
	Cost of goods available for sale	195600
	Less: Ending Finished Goods inventory	69500
	Cost of Goods Sold		126100
	Gross profit		111800
	Less: Operating expenses
	Selling, general, and administrative expenses		24100
	Net Income (Loss) from Operations		87700