Question

The following events took place for Digital Vibe Manufacturing Company during January, the first month of its operations as a producer of digital video monitors:

1. Purchased $51,800 of materials
2. Used $39,900 of direct materials in production.
3. Incurred $59,600 of direct labor wages.
4. Incurred $83,900 of factory overhead.
5. Transferred $139,300 of work in process to finished goods.
6. Sold goods for $249,200.
7. Sold goods with a cost of $110,900.
8. Incurred $63,700 of selling expenses.
9. Incurred $28,000 of administrative expense.

Using the information given, complete the following:

a. Prepare the January income statement for Digital Vibe Manufacturing Company.

Digital Vibe Manufacturing Company
Income Statement
For the Month Ended January 31
		$
		$
Operating expenses:
	$
Total operating expenses
		$

b. Determine the Materials Inventory, Work in Process Inventory, and Finished Goods Inventory balances at the end of the first month of operations.

Digital Vibe Manufacturing Company
Inventory Balances
For the Month Ended January 31
Inventory balances on January 31:
Materials	$
Work in process
Finished goods

Answer 1

Digital Vibe Manufacturing Compan Income Statement For the Month Ended January 31 $ 249,200 Sales Cost of goods sold Gross profit $110,900 $ 138,300 Operating expenses S63,700 Selling expenses Administrative expenses Total operating expenses $28,000 $91,700 $46,600 Net income Digital Vibe Manufacturing Company Inventory Balances For the Month Ended January 31 Inventory balance on January 31 $ 11,900 $44,100 $66,800 Materials Work in process Finished goods

Materials Inventory = Materials Purchased - Materials Used in Production
Materials Inventory = $51,800 - $39,900
Materials Inventory = $11,900

Manufacturing Costs = Materials Used in Production + Direct Labor + Factory Overhead
Manufacturing Costs = $39,900 + $59,600 + $83,900
Manufacturing Costs = $183,400

Work in Process Inventory = Manufacturing Costs - Work in Process transferred to Finished Goods
Work in Process Inventory = $183,400 - $139,300
Work in Process Inventory = $44,100

Finished Goods Inventory = Cost of Goods Sold - Work in Process transferred to Finished Goods
Finished Goods Inventory = $110,900 - $44,100
Finished Goods Inventory = $66,800