Question

Case B $ 20,000 Case A $ 10,000 90,000 100,000 70,000 Case C $ 15,000 30,000 85,000 95,000 100,000 Beginning inventory, raw material Ending inventory, raw material Purchases of raw material Direct material Direct labor Manufacturing overhead Total manufacturing costs Beginning inventory, work in process Ending inventory, work in process Cost of goods manufactured Beginning inventory, finished goods Cost of goods available for sale Ending inventory, finished goods Cost of goods sold 125,000 160,000 340,000 250,000 520,000 35,000 345,000 20,000 35,000 5,000 350,000 525,000 50,000 40,000 370,000 25,000 545,000 330,000 480,000 255,000 170,000 75,000 Sales Gross margin Selling and administrative expenses Income before taxes Income tax expense Net income 90,000 150,000 40,000 45,000 55,000

Answer 1

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	Case A	Case B	Case C
Beginning Inventory, raw materials	$           60,000	$           20,000	$           15,000
Ending Inventory, raw materials	$           90,000	$           10,000	$           30,000
Purchase of raw material	$       1,00,000	$           85,000	$           70,000
Direct material	$           70,000	$           95,000	$           55,000
Direct Labor	$       2,00,000	$       1,00,000	$       1,25,000
Manufacturing overhead	$       2,50,000	$       1,50,000	$       1,60,000
Total manufacturing costs	$       5,20,000	$       3,45,000	$       3,40,000
Beginning Inventory, work in process	$           35,000	$           20,000	$           15,000
Ending Inventory, work in process	$           30,000	$           35,000	$             5,000
Cost of goods manufactured	$       5,25,000	$       3,30,000	$       3,50,000
Beginning Inventory, finished goods	$           50,000	$           40,000	$           20,000
Cost of goods available for sale	$       5,75,000	$       3,70,000	$       3,70,000
Ending Inventory, finished goods	$           30,000	$           40,000	$           25,000
Cost of goods sold	$       5,45,000	$       3,30,000	$       3,45,000
Sales	$       8,00,000	$       5,00,000	$       4,80,000
Gross margin	$       2,55,000	$       1,70,000	$       1,35,000
Selling and administrative Expenses	$       1,05,000	$           75,000	$           45,000
Income before taxes	$       1,50,000	$           95,000	$           90,000
Income tax expense	$           40,000	$           45,000	$           35,000
Net Income	$       1,10,000	$           50,000	$           55,000

Case A Case B Case C 2 Beginning Inventory, raw materials 3 Ending Inventory, raw materials 3B5-B4+Bз 20000 15000 90000 =C2+C4-C5 30000 4 Purchase of raw material 100000 85000 =D5+D3-D2 5 Direct material 95000 70000 =D8-D7-D6 6 Direct Labor =B8-B7-B5 100000 125000 7 Manufaturing overhead 250000 —С8-Сб-С5 160000 8 Total manufacturing costs 520000 345000 340000 9 Beginning Inventory, work in process 10 Ending Inventory, work in process 11 Cost of goods manufactured 35000 20000 =D11+D10-D8 =B8+B9-B11 35000 5000 525000 =C8+C9-C10 350000 12 Beginning Inventory, finished goods 50000 40000 =D13-D11 13 Cost of goods available for sale 14 Ending Inventory, finished goods =C11+C12 =B11+B12 370000 25000 =B13-B15 =C13-C15 15 Cost of goods sold 545000 330000 =D13-D14 16 Sales =C15+C17 480000 =B15+B17 17 Gross margin 18 Selling and administrative Expenses 255000 170000 =D16-D15 75000 =D17-D19 =B17-B19 19 Income before taxes 150000 =C17-C18 90000 20 Income tax expense 40000 45000 =D19-D21 55000 21 Net Income =B19-B20 =C19-C20