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, 200 21,300 78,800 Ending Inventory $26,200 46,200 68,800 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 2,000 63,300 35,400 24,300 236,700 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

Ans:

StorSmart Company
Cost of goods Manufactured Report
For the month of March
Beginning raw materials inventory	$ 28,200
Add: Raw material purchases	$ 41,000
Less: Indirect materials	$ 2,000
Less: Ending raw material inventory	$ 26,200
Direct raw material used in production (a)	$ 41,000
Direct labour (b)	$ 63,300
Manufacturing overhead (c)	$ 35,400
Total current manufacturing costs (a+b+c)	$ 139,700
Add: Beginning work in process inventory	$ 21,300
Less:Ending work in process inventory	$ 46,200
Cost of goods manufactured	$ 114,800

StorSmart Company
The Income Statement
For the month of March
Sales Revenue		$ 236,700
Less:Cost of goods sold
Cost of goods manufactured	$ 114,800
Add: Beginning finished inventory	$ 78,800
Less: Ending finished goods inventory	$ 68,800
Cost of Goods Sold		$ 124,800
Gross Profit		$ 111,900
Less: Operating expenses (selling & administ. expenses)		$ 24,300
Net operating income		$ 87,600