Question

Consider the following account balances (in thousands) for the Sillow Corporation: "(Click the icon to view the account balances) Requirements 1. Prepare a schedule for the cost of goods manufactured for 2017 2. Revenues (in thousands) for 2017 were $1.200,000 Prepare the income statement for 2017 Requirement 1. Prepare a schedule for the cost of goods manufactured for 2017 Start with the direct materials and labor costs, then manufacturing overhead costs, and complete the schedule by calculating cost of goods manufactured Sillow Corporation Schedule of Cost of Goods Manufactured For the Year Ended December 31, 2017 (in thousands) Direct materials: (2) Direct materials used Direct manufacturing labor Manufacturing overhead costs: (9) |(10) Total manufacturing overhead costs Manufacturing costs incurred during 2017 |(11) Total manufacturing costs to account for (12) Cost of goods manufactured Requirement 2. Revenues in thousands) for 2017 were $1,200,000. Prepare the income statement for 2017. (Use a minus sign or parentheses for an operating loss.)

Answer 1

1)

Sillow Corporation
Schedule of Cost of goods manufactured
For the year ended December 31, 2017 (in thousands)
Direct materials:
Beginning of raw materials inventory	$132000
Add: Purchases of raw materials	265000
Total raw materials available	397000
Less: Ending raw materials inventory	-69000
Direct materials used		$328000
Direct manufacturing labor		215000
Manufacturing overhead costs:
Indirect manufacturing labor	103000
Plant insurance	2000
Depreciation- plant, building and equipment	43000
Plant utilities	23000
Repairs and maintenance- plant	11000
Equipment leasing costs	62000
Total manufacturing overhead costs		244000
Manufacturing costs incurred during 2017		787000
Add: Beginning work in process inventory		168000
Total manufacturing costs to account for		955000
Less: Ending work in process inventory		-142000
Cost of goods manufactured		$813000

2)

Sillow Corporation
Income Statement
For the year ended December 31, 2017 (in thousands)
Sales revenue		$1200000
Cost of goods sold
Beginning finished goods inventory	$230000
Add: Cost of goods manufactured	813000
Total cost of goods available for sale	1043000
Less: Ending finished goods inventory	-204000
Cost of goods sold		839000
Gross profit		361000
Operating costs:
Marketing, distribution and customer service costs	129000
General and administrative costs	66000
Total operating costs		-195000
Operating income (loss)		$166000