Question

Norton Industries, a manufacturer of cable for the heavy construction industry, closes its books and prepares financial statements at the end of each month. The statement of cost of goods sold for April follows: NORTON TNDUSTRIES Statement of Cost of Goods Sold For the Month Ended April 30 (5000 omitted) Finished goods inventory, March 31 Cost of goods manufactured Cost of goods available for sale Less: Finished goods inventory, April 30 Cost of goods sold $ 37 260 292 $50s Additional Information • Of the utilities, 80% relates to manufacturing the cable; the remaining 20% relates to the sales and administrative functions. • All rent is for the office building, • Property taxes are assessed on the manufacturing plant. • or the insurance, 60% is related to manufacturing the cable; the remaining 40% is related to the sales and administrative functions. • Depreciation expense includes the following: Manufacturing plant Manufacturing equipment Office equipment $ 19,700 29,300 $ 55,000

Answer 1

Norton Industries ('000 omitted) ('000 omitted) 1806 -20 43 585 1786 30 658 292 -38 1292 620 1584 50 -235 1349 Statement of Cost of Goods Manufactured For the month ending May 31, Direct Materials Beg. Inventory Purchases Freight in Direct Materials Available Ending Inventory Direct Materials Used Direct Labor Factory Overhead Depreciation Expense - Plant Depreciation Expense - Equip. Utilities Insurance Indirect labor Property taxes- Plant Total Factory overhead Total Manufacturing Cost beg. WIP Inventory Total Manufacturing cost ito account for End. WIP Inventory Cost of Goods Manufactured 19.7 437 29.3 Income Statement For the month ending May 31, Sales Revenue Sales Discount Net sales Cost of Goods Sold Beg. Finished Goods Cost of Goods Manufactured Cost of goods available for sale End. Finished goods Inventory Cost of goods sold Gross Margin Sellings & Administrative Expenses Utilities Rent Insurance Depreciation Office salaries Sales Salaries Total Selling & Admin. Expenses Operating Income Other Revenue & Expense Other Revenue Total Other Gross Profit 136 34 12 24 120 8 90 6 407 152 1377 72 180 296 141 1557 265 1292 2 2 2 143