Question

Yolo Windows, a manufacturer of windows for commercial buildings, reports the following account information for last year (all costs are in thousands of dollars). Information on January 1 (Beginning): Direct materials inventory $ 82 Work-in-process inventory 111 Finished goods inventory 1,670 Information for the year: Administrative costs $ 3,690 Direct labor 12,950 Direct materials purchases 8,200 Factory and machine depreciation 11,510 Factory supervision 762 Factory utilities 927 Indirect factory labor 2,910 Indirect materials and supplies 686 Marketing costs 1,520 Property taxes on factory 298 Sales revenue 45,700 Information on December 31 (Ending): Direct materials inventory $ 99 Work-in-process inventory 139 Finished goods inventory 1,470 Required: 1. Prepare a cost of goods sold statement. 2. Prepare an income statement.

Answer 1

1.

Yolo Windows
Statement of cost of goods sold
for the year ended December, 31
	$ in thousands
Beginning Finished Goods	1,670.00
Add: Cost of goods manufactured	38,476.00
Cost of goods available for sale	40,146.00
Less: Ending Finished Goods	(1,470.00)
Adjusted Cost of goods sold	38,676.00

2.

Yolo Windows
Income Statement
	$ in thousands	$ in thousands
Sales Revenue		45,700.00
Less: Cost of goods sold		38,676.00
Gross Margin		7,024.00
Less:
Administrative costs	3,690.00
Marketing costs	1,520.00	5,210.00
Total marketing and administrative costs
Operating profit		1,814.00

Explanation

Yolo Windows
SCHEDULE OF COST OF GOODS MANUFACTURED
FOR YEAR ENDED DECEMBER 31
	($) in thousands
Direct materials:
Beginning Raw Materials Inventory	82.00
Add: Raw materials purchases	8,200.00
Raw materials available for use	8,282.00
Less: Ending raw materials inventory	(99.00)
Direct materials used		8,183.00
Direct labor		12,950.00
Factory overhead:
Factory and machine depreciation	11,510.00
Factory supervision	762.00
Factory Utilities	927.00
Indirect factory labor	2,910.00
Indirect materials and supplies	686.00
Property taxes on factory	298.00
Total factory overhead costs		17,093.00
Total manufacturing costs		38,226.00
Add: Beginning Work in process inventory		111.00
Total cost of work in process		38,337.00
Less: Ending Work in process inventory		(139.00)
Cost of goods manufactured		38,476.00