Question

Problem 14-SA (Part Level Submission) Incomplete manufacturing costs, expenses, and selling data for two different cases are as follows. (a) Indicate the missing amount. Case $9,790 Direct materials used Direct labor Manufacturing overhead Total manufacturing costs 6,000 8,780 2800 9,000 4,530 16,330 24570 Beginning work in process inventory 1,660 Ending work in process inventory 4910 3,980 Sales revenue Sales discounts Cost of goods manufactured Beginning finished goods inventory 25,890 2,990 17,270 1,790 23,050 4,050 22,180 27030 Goods available for sale Cost of goods sold Ending finished goods inventory Gross profit 4,020 2,810 7,800 Operating expenses 3,170 Net income 5,240

Answer 1

Explanation for Case-1: Direct materials used Direct labor Manufacturing overhead Total manufacturing costs Beginning work in process inventory Ending work in process inventory Case 1 2 $9,790 $2,800 $6,000 $9,000 $8,780 $4,530 $24,570 $16,330 $1,660 $10,700 $8,960 $3,980 Total mfg. costs = DM used + DL ocst + Mfg. OH = $9790 + $6000 + $8780 = $24570; Ending WIP = Total mfd. costs + Beg. WIP - Cost of goods manufactured = $24570 + $1660 - $17270 = $8960; Beg. Finished goods = Goods available for sale - Cost of goods manufactured = $22180 - $17270 = $4910; Cost of goods sold = Goods available for sale - Cost of finished goods = $22180 - $4020 = $18160; Gross profit = Sales - Sales discounts - Cost of goods sold = $25890 - $2990 - $18160 = $4740; Net income = Gross profit - Operating expense = $4740 - $3170 = $1570. Explanation for Case-2: Sales revenue Sales discounts $25,890 $2,990 $33,880 $1,790 Cost of goods manufactured Beginning finished goods inventory Goods available for sale Cost of goods sold Ending finished goods inventory Gross profit Oeprating expenses Net income $17,270 $4,910 $22,180 $18,160 $4,020 $4,740 $3,170 $1,570 $23,050 $4,050 $27,100 $24,290 $2,810 $7,800 $2,560 $5,240 DM used = Total mfg. costs - DL cost - Mfg. OH = $16330 - $9000 - $4530 = $2800; Beginning WIP = Cost of goods manufactured + Ending WIP - Total mfg. costs = $23050 + $3980 - $16330 = $10700; Goods available for sale = Cost of goods manufactured + Beginning FG = $23050 + $4050 = $27100; Cost of goods sold = Goods available for sale - Ending FG = $27100 - $2810 = $24290; Operating expenses = Gross profit - Net income = $7800 - $5240 = $2560; Sales revenue = Gross profit + Cost of goods sold + Sales discounts = $7800 + $24290 + $1790= $33880.