Mesa Designs produces a variety of hardware products, primarily for the do-it-yourself (DIY) market. As part of your job interview as a summer intern at Mesa, the cost accountant provides you with the following (fictitious) data for the year (in $000):
| Inventory information: | 1/1/00 | 12/31/00 | ||
| Direct materials | $ | 52 | $ | 59 |
| Work-in-process | 80 | 72 | ||
| Finished goods | 991 | 1,017 | ||
| Other information: | For the year ’00 | |
| Administrative costs | $ | 2,500 |
| Depreciation (Factory) | 2,980 | |
| Depreciation (Machines) | 4,660 | |
| Direct labor | 6,900 | |
| Direct materials purchased | 5,190 | |
| Indirect labor (Factory) | 1,710 | |
| Indirect materials (Factory) | 520 | |
| Property taxes (Factory) | 205 | |
| Selling costs | 1,110 | |
| Sales revenue | 32,110 | |
| Utilities (Factory) | 570 | |
Required:
Prepare the income statement with a supporting cost of goods sold statement. (Enter your answers in thousands of dollars (i.e., 234,000 should be entered as 234).)
Answer-
| MESA DESIGNERS | ||
| INCOME STATEMENT | ||
| PARTICULARS | AMOUNT | AMOUNT |
| $ | $ | |
| Sales | 32110 | |
| Less-Cost of goods sold | 22710 | |
| Gross margin | 9400 | |
| Less- Selling & administrative expenses | 3610 | |
| Selling costs | 1110 | |
| Administrative expenses | 2500 | |
| Net Operating income | 5790 |
Explanation-
| MESA DESIGNERS | |||
| COST OF GOODS MANUFACTURED SCHEDULE | |||
| FOR THE YEAR ENDED | |||
| $ in 000 | |||
| PARTICULARS | AMOUNT | AMOUNT | AMOUNT |
| $ | $ | $ | |
| Work in process (1/1) | 80 | ||
| Direct Materials | |||
| Raw materials inventory (1/1) | 52 | ||
| Raw materials purchases | 5190 | ||
| Raw materials available for use | 5242 | ||
| Raw materials inventory (12/31) | 59 | ||
| Direct materials used | 5183 | ||
| Direct labor | 6900 | ||
| Manufacturing overhead | |||
| Depreciation (Factory) | 2980 | ||
| Depreciation (Machines) | 4660 | ||
| Indirect labor (Factory) | 1710 | ||
| Indirect materials (Factory) | 520 | ||
| Property taxes (Factory) | 205 | ||
| Utilities (Factory) | 570 | ||
| Total overhead | 10645 | ||
| Tota manufacturing costs | 22728 | ||
| Total cost of work in process | 22808 | ||
| Less- Work in process (12/31) | 72 | ||
| Cost of goods manufactured | 22736 |
| MESA DESIGNERS | ||
| COST OF GOODS SOLD | ||
| PARTICULARS | Amount | |
| $ in 000 | ||
| Beginning finished goods inventory | 991 | |
| Add: Cost of goods manufactured | 22736 | |
| Cost of goods available for sale | 23727 | |
| Less: Ending finished goods inventory | 1017 | |
| Cost of goods sold | 22710 |
Mesa Designs produces a variety of hardware products, primarily for the do-it-yourself (DIY) market. As part...
Mesa Designs produces a variety of hardware products, primarily for the do-it-yourself (DIY) market. As part of your job interview as a summer intern at Mesa, the cost accountant provides you with the following (fictitious) data for the year (in $000). Inventory information: 1/1/00 12/31/00 Direct materials $ 53 $ 60 Work-in-process 81 73 Finished goods 992 1,018 Other information: For the year ’00 Administrative costs $ 2,600 Depreciation (Factory) 3,030 Depreciation (Machines) 4,670 Direct labor 7,000 Direct materials purchased...
Mesa Designs produces a variety of hardware products, primarily for the do-it-yourself (DIY) market. As part of your job interview as a summer intern at Mesa, the cost accountant provides you with the following (fictitious) data for the year (in $000). Inventory information: 1/1/00 12/31/00 Direct materials $ 49 $ 56 Work-in-process 77 69 Finished goods 988 1,014 Other information: For the year ’00 Administrative costs $ 2,200 Depreciation (Factory) 2,830 Depreciation (Machines) 4,630 Direct labor 6,600 Direct...