Question

Consider the following account balances​ (in thousands) for the

BeneschBenesch

​Company:

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​(Click the icon to view the account​ balances.)

Requirements

1. Prepare a schedule for the cost of goods manufactured for

20172017.

2. Revenues for

20172017

were

$ 270$270

million. Prepare the income statement for

20172017.

Requirement 1. Prepare a schedule for the cost of goods manufactured for

20172017.

Begin by preparing the schedule of cost of goods manufactured​ (in thousands). Start with the direct materials and labor​ costs, then indirect manufacturing​ costs, and complete the schedule by calculating cost of goods manufactured.

Benesch Company
Schedule of Cost of Goods Manufactured
For the Year Ended December 31, 2017 (in thousands)
Direct materials:
	Beginning inventory, Jan. 1, 2017	$24,000
	Purchases of direct materials	75,000
	Cost of direct materials available for use	99,000
	Ending inventory, Dec. 31, 2017	28,000
Direct materials used			$71,000
Direct manufacturing labor			20,000

Indirect manufacturing costs:
Total indirect manufacturing costs

	Beginning of	End of
Benesch Company	2017	2017
Direct materials inventory	24,000	28,000
Work-in-process inventory	27,000	25,000
Finished-goods inventory	18,000	23,000
Purchases of direct materials		75,000
Direct manufacturing labor		20,000
Indirect manufacturing labor		10,000
Plant insurance		7,000
Depreciation—plant, building, and equipment		12,000
Repairs and maintenance—plant		3,000
Marketing, distribution, and customer-service costs		111,000
General and administrative costs		36,000

Answer 1

Solutions:

Smith Corporation
Schedule of cost of goods manufactured (In thousands)
Direct Material:
Direct Material, Beginning	$24,000
Add: Purchase of direct Material	$75,000
Total Direct material available for use	$99,000
Less: Direct Material, Ending	$28,000
Direct Materials used in production		$71,000
Direct manufacturing Labor		$20,000
Indirect Manufacturing costs:
Indirect manufacturing Labor	$10,000
Plant Insurance	$7,000
Depreciation—plant, building, and equipment	$12,000
Repairs and maintenance—plant	$3,000
Total Indirect Manufacturing costs		$32,000
Total Manufacturing Costs		$1,23,000
Add: Work in Process, Beginning		$27,000
Subtotal		$1,50,000
Less: Work in Process, Ending		$25,000
Cost of goods manufactured		$1,25,000
Smith Corporation
Income Statement (in thousands)
Sales revenue		$2,70,000
Cost of Goods sold:
Cost of goods manufactured	$1,25,000
Add: Finished goods, Beginning	$18,000
Total Cost of goods available for sale	$1,43,000
Less: Finished Goods, Ending	$23,000
Cost of goods sold		$1,20,000
Gross Profit		$1,50,000
Less: Marketing, distribution, and customer-service costs		$1,11,000
Less: General and administrative costs		$36,000
Net Income		$3,000