Question

Requirement Prepare an income statement and a supporting schedule of cost of goods manufactured Begin by preparing the supporting schedule of cost of goods manufactured (in millions). Start with the direct materials and direct labor costs, then indirect manufacturing costs, and complete the schedule by calculating cost of goods manufactured. Cougar Corporation Schedule of Cost of Goods Manufactured For the Year Ended December 31, 2017 (in millions) Direct material costs: Direct materials used Direct labor manufacturing costs Indirect manufacturing costs: Total indirect manufacturing costs Manufacturing costs incurred during 2017 Total manufacturing costs to account for

Answer 1

Solution:

Cougar Corporation
Cost of goods manufactured
for the year ended december 31,2017
Direct materials
Raw materials inventory jan1 ,2017	39
Raw materials purchases	87
Raw materials available for use	126
Less: Raw materials inventory, december 31,2017	10
Direct materials used		116
Direct manufacturing labour		47
Indirect manufacturing costs
Indirect manufacturing labour	27
Plant supplies	5
Plant utilities	9
Property taxes on plant	4
Depreciation-plant and equipment	8
Miscellaneous	14
Total Indirect manufacturing costs		67
Manufacturing costs incurred during 2017
Beginning work in process inventory jan 1, 2017		20
Total manufacturing costs to account for		250
Ending work inprogress inventory, dec31, 2017		2
Cost of goods manufactured		248

Cougar Corporation
Income Statement
For the year Ended December 31,2017
Revenues		355
Cost of goods sold
Beginning finished goods inventory , jan1 ,2017	40
Cost of goods manufacutred	248
Cost of goods available for sale	288
Ending finished goods invnetory dec31,2017	12
Cost of goods sold		276
Gross profit		79
Marketing, distribution and customer service costs		99
Operating Income(loss)		-20