Question

Harper Company has the following information for the year ended December 31, 2018. (Click the icon to view the information.) Use the information to prepare a schedule of cost of goods manufactured and an income statement. Assume no indirect materials are used and all amounts are shown in millions. Begin by preparing a schedule of cost of goods manufactured. Harper Company Schedule of Cost of Goods Manufactured Year Ended December 31, 2018 (in millions) Beginning Work-in-Process Inventory Direct Materials Used Direct Labor Manufacturing Overhead Allocated Total Manufacturing Costs Incurred during the Year Total Manufacturing Costs to Account for Ending Work-in-Process Inventory 6 Data Table Cost of Goods Manufactured Now prepare an income statement. Harper Company Income Statement Year Ended December 31, 2018 (in millions) Inventory balances: Beginning Ending Work-in-Process Finished Goods 7 16 Other information: Sales Revenue Selling and Administrative Expenses Direct Labor Manufacturing Overhead; actual and allocated Direct Materials Used $ 228 Print Done Cost of Goods Sold Gross Profit Net Income (Loss)

Answer 1

Solution:

Schedule of cost of goods manufactured
Work in Process, Beginning		$10
Direct Materials used in production	$51
Direct Labor cost	$34
Factory Overhead	$17
Total Manufacturing Costs incurred		$102
Total manufacturing costs to account for		$112
Less: Work in Process, Ending		$17
Cost of goods manufactured		$95

Income Statement
Sales Revenue		$228
Cost of Goods Sold:
Cost of goods manufactured	$95
Add: Finished goods, Beginning	$7
Total Cost of goods available for sale	$102
Less: Finished Goods, Ending	$16
Cost of Goods Sold		$86
Gross Profit		$142
Less: Selling and administrative expenses		$81
net Income (Loss)		$61