Question

Manufacturing Income Statement, Statement of Cost of Goods Manufactured

Several items are omitted from the income statement and cost of goods manufactured statement data for two different companies for the month of December:

	On Company		Off Company
Materials inventory, December 1	$82,890		$113,560
Materials inventory, December 31	(a)		128,320
Materials purchased	210,540		255,510
Cost of direct materials used in production	222,150		(a)
Direct labor	312,500		(b)
Factory overhead	96,980		127,190
Total manufacturing costs incurred in December	(b)		734,730
Total manufacturing costs	790,770		790,780
Work in process inventory, December 1	159,150		273,680
Work in process inventory, December 31	134,280		(c)
Cost of goods manufactured	(c)		727,920
Finished goods inventory, December 1	140,080		127,190
Finished goods inventory, December 31	146,720		(d)
Sales	1,221,800		1,135,600
Cost of goods sold	(d)		734,730
Gross profit	(e)		(e)
Operating expenses	159,150		(f)
Net income	(f)		252,100

Required:

1. Determine the amounts of the missing items, identifying them by letter. Enter all amounts as positive numbers.

Letter	On Company	Off Company
a.	$	$
b.	$	$
c.	$	$
d.	$	$
e.	$	$
f.	$	$

2.

Prepare On Company's statement of cost of goods manufactured for December.

On Company
Statement of Cost of Goods Manufactured
For the Month Ended December 31
Work in process inventory, December 1			$
Direct materials:
Materials inventory, December 1	$
Purchases
Cost of materials available for use	$
Materials inventory, December 31
Cost of direct materials used in production		$
Direct labor
Factory overhead
Total manufacturing costs incurred during December
Total manufacturing costs			$
Work in process inventory, December 31
Cost of goods manufactured			$

3. Prepare On Company's income statement for December.

On Company
Income Statement
For the Month Ended December 31
Sales		$
Cost of goods sold:
Finished goods inventory, December 1	$
Cost of goods manufactured
Cost of finished goods available for sale	$
Finished goods inventory, December 31
Cost of goods sold
Gross profit		$
Operating expenses
Net income		$

Answer 1

1. Calculations for missing values. For On Company, @ Materials purchased + Materials inventory, Decl)- cost of direct materies used in Production - -> (210,540 + 8 2,890) - 222150 = $71,280 (a) = Materials inventory, Dec 31 = $71,280 6) Cost or direct materials used in production & Direct labor+ Factory overhead - 222,150 + 312,500 + 96,980 = $631, 630 ..(b): Total manufacering cost incurred during Dec - $631,630 (c) Total manufacturing costst work in Process inventory, Dec!)- work in Process Inventory Dec, 31 => (799,740 +159,150) - 134.2,80 = $815,640 .. () : cost of 9 cods manufactured = $815,640 (d) (Cost of Goods manufactured & Finished goods inventory, Dec!) Finished goods inventory, Dec 31. -> (815.640 +140080 ) - 146520 = $ 809,000 (d) = cost of goods sold = $809,000 (e) sales - cost of (f) > 1, 221,800 - 809,000 = $412,800 (e) = Gross Profit = $412,800 Gross Profil - operating expenses => 412, 800 - 159,150 $253.650 (f) = Net Income = $253, 650 FOT Off company, a) Materials inventory. Decl.- Motorials inventory Dec 31 Modenals Puchatel -) 13560 - 128320+255510 = 3240,150 ... (al cost of direct materials used in Production = $240,750 (6) Total manufacturing costs incurred during dec- cost of direct materials used in Production & Factory overhead) -> 734 730 - 1240750 + 121,190) = $ 366,990 (b) = Direct labor = $366, 790

to Total manufacturing costst work in Process inventory, Dec!) cost of Goods sold => 4490780 + 273,680) - 134930 = $329,730 .:(() work in process inventory , Dec 31 = $329,730 Al cost of Goods manufactured & Factory overhead cost of Goods sold -) 327920 +129190-934930 = $120,380 ..(d) Finished goods inventory, Dec 31 = $120,380 (e) sales - cost of goods sold =) 1,135,600-734730 = $400,870 . (@2905S Profit - $ 400,890 (f) Gross Profit - Net Income -> 400870-252100 $148990 .... (f) = Operating expenses $148770 on company off company Materials inventory, December $82,890 $ 113560 Materials inventory, December 31 -971,280 $128320 Materials Purchased $210 540 $255510 Cost of direct materials used in production $222,150 a $ 240,750 Direct labor $312,500 $366,790 factory overhead $ 96,980 | $127, 190 Total manufacturing costs inccured in Dec (0) $631,630 $734,730 Total manufacturing costs $790,770 $990780 work in process inventory, Deci $159,150 $293680 work in process inventory, Dec 31 de | $134,280 To $329,730 cost of goods manufactured (c) $815,640 $724,920 Finished goods inventory December $140,080 $127, 190 Finished d |$146720 ) $120,380 goods inventory December 2) $1221,800 $1,135,600 a) $809,000 $734,730 Cost of goods sold (e) $412,800 Re $400,870 Gross Profit 9 159,150 $148790 Operating expenses *) $253,650 $1252,100 sales Net Income

2 On company's statement of cost of goods manufactured for Dec Particulars lon company Materials inventory, Decl $ 82,890 Add: Materials Purchased $ 210, 540 $ 293,430 Less Materials inventory, Dec 31 $71280 Raw materials Plachased $222, 150 Add: Direct labor $ 312,500 Factory overhead $96,980 Manufacturing overhead incurred $631,630 Total manufacturing costs $ 790,70 | Add: Openning WIP $ 159,150 $ 949920 | Less Ending WIP $ 139,030 Cost of Goods manufactured | $815 640 | Add: openning finished Goods $140,080 $ 955,720 | Less: Ending Finished Goods $146,720 cost of Goods sold $ 809,000 of Company $ 113,560 $ 255,510 $369070 $128,320 $240.750 $366, 790 $129,190 $7347 30 $ 790,80 $273,650 $1,064,460 $329730 3 727920 $127,190 $ 855110 $120, 380 $ 734.730 3) Calculation of Income statement or . Particulars Sales Less cost of Goods sold Gross Profit Less: Operating Expenses I Net Income on company $1,221,800 $809,000 $412,800 $159,150 $253,650 off Company $1,135,600 $ 734, 730 $400, 870 $ 148,770 $ 252,100