Question

$ #1 JackJoe Corporation provided the following list of cost data related to its manufacturing operations for the month of September 20X4. All raw materials are direct materials. Beginning raw materials inventory 500,000 Raw materials purchased (net) 2,000,000 Ending raw materials inventory 750,000 Direct labor costs 400,000 Factory rent (fixed) 125,000 Indirect labor (fixed) 95,000 Factory utilities and maintenance (fixed) 450,000 Factory depreciation (fixed) 56,000 Beginning work in process 777,000 Ending work in process 717,000 SG&A sales commissions variable 400,000 SG&A fixed 2,500,000 Beginning Finished goods inventory 3,000,000 must be Ending Finished goods inventory calculated Arrange the cost data into a statement of cost of goods manufactured. If JackJoe sold 10,000 units for $10,000,000 at a cost of goods sold for the month was $4,000,000, what was the ending balance in finished goods inventory for the month of September? Write the journal entries to (1) purchase the raw materials, (2) transfer raw materials to W-I-P, (3) transfer goods manufactured to finished goods and (4) reduce inventory for goods sold. Prepare a multi-step income statement Compute breakeven in units and sales dollars assuming Variable costs are $300 per unit Compute the contribution margin on a per unit basis

Answer 1

Answer is given below

Statement of Cost of good manufactured Opening inventory of Raw Material $500,000 Add: purchases $2,000,000 Total Raw Material Available $2,500,000 Less: Closing inventory of Raw Material $750,000 Raw material used Direct Labor Prime Cost Indirect labor $95,000 factory rent $125,000 factory utilities and maintenance $450,000 factory depreciation $56,000 $1,750,000 $400,000 $2,150,000 Total manufacturing cost Add: Opening work in process inventory $726,000 $2,876,000 $777,000 $3,653,000 $717,000 $2,936,000 Less: Closing work in process inventory Cost of Goods Manufactured Closing inventory balance of Finished Goods Opening Finished Goods inventory Add: Cost of Goods manufactured Cost of Goods available for sale Cost of good sold Closing Finished Goods inventory $3,000,000 $2,936,000 As per working above $5,936,000 $4,000,000 $1,936,000 $2,000,000 $2,000,000 $1,750,000 $1,750,000 c) Journal Entries Material Inventory control Account To Accounts Payable (To record material purchased on account) Work in process Account To Material Inventory control Account (To record issue of material) Finished Goods Inventory To Work in process Account (To record transfer of goods from WIP to Finished Goods ) Cost of Goods Sold To Finished Goods Inventory (To record transfer of Finished Goods to Cost of Goods Sold) $2,936,000 $2,936,000 $4,000,000 $4,000,000 Income Statement For the year ended September 20X4 Sales Less: Cost of Goods Sold Gross profit Less: Operating expenses Selling and general administrative expenses Net profit $10,000,000 $4,000,000 $6,000,000 $2,900,000 $3,100,000 Sales units Break even point in units e) Fixed cost Contribution per unit | $3,226,000 $3,226,000 $7001 4,609 4,609 Fixed Cost Manufacturing expenses Selling and administrative expenses Total fixed costs $726,000 $2,500,000 $3,226,000 Sales $ Break even point in Sales $ Fixed cost Contribution margin $3,226,000 70% $4,608,571 Selling price per unit Variable cost per unit Contribution margin per unit Contribution margin ratio $1,000 $300 $700 70%