Question

Manufacturing costs for Davenport Company during 2018 were as follows: 

Beginning Finished Goods, 1/1/18 Beginning Raw Materials, 1/1/18 Beginning Work in Process, 1/1/15 Direct Labor for 2018 Ending Finished Goods, 12/31/18 Ending Raw Materials, 12/31/18 Ending Work in Process, 12/31/18 Material Purchases for 2018 (including $23,500 of indirect material) $ 25, Bee 37, 2ee 112, Bee $ 277,000 24,100 41,100 122.3ee 395, 9ee 

Note: The pre-determined overhead rate is 0.92 (92%) of direct labor cost. 

Required: 

1. Prepare a Cost of Goods Manufactured report 

2. Prepare a Partial income Statement if sales revenue was $1.420,000 and operating expenses were $295,000 for 2018

Answer 1

Answer DAVENPORT COMPANY Cost of Goods Manufactured Report For the Year 2018 Beginning Raw materials Add: purchase of raw materials - direct (305900-23500) Raw material available for use Less: ending raw materials Direct materials used in production Add: direct labor Add: manufacturing overhead applied (working note) Total current manufacturing costs Add: beginning work in process Less: ending work in process Cost of goods manufactured $ 37,200 $ 282,400 $ 319,600 $ 41,100 $ 278,500 $ 277,000 $ 254,840 $ 810,340 $ 112,000 $ 122,300 $ 800,040 working note manufacturing overhead applied = direct labor cost * pre determined overhead rate = 277000*92% = $ 254,840

$ 1,420,000 DAVENPORT COMPANY Income Statement For the Year 2018 Sales revenue Less: cost of goods sold : Beginning finished goods add: cost of goods manufactured Cost of goods available for sale less: Ending finished goods Cost of goods sold Gross profit Less: operating expenses Net income from operations $ 25,800 $ 800,040 $ 825,840 $ 24,100 $ $ $ $ 801,740 618,260 295,000 323,260