Question

LO 2,4 Operating income $75 COGM, $762 2-37 Statement of comprehensive income and schedule of cost of goods manufactured. The Powell Corporation has the following account balances (in millions): For Specific Date For Year 2019 Direct materials, January 1, 2019 $15 Purchases of direct materials $ 390 Work in process, January 1, 2019 10 Direct manufacturing labour 120 Finished goods, January 1, 2019 70 Depreciation-plant building and 96 equipment Direct materials, December 31, 2019 20 Plant supervisory salaries 6 Work in process, December 31, 2019 5 Miscellaneous plant overhead 42 Finished goods, December 31, 2019 55 Revenues 1,140 Marketing, distribution, and customer 288 service costs Plant supplies used 12 Plant utilities 36 Indirect manufacturing labour 60

Answer 1

Statement of Cost of Goods manufactured (in $ millions )
Beginning Work in process			$ 10
Beginning Direct materials	$ 15
Add: Direct material Purchases	$ 390
Total Raw material available for use	$ 405
Less: Ending Direct material inventory	($ 20)
Direct materials used		$ 385
Direct manufacturing Labor		$ 120
Manufacturing Overhead Costs :
- Depreciation- plant, building & equipment	$ 96
- Plant supervisory salaries	$ 6
- Miscellaneous plant overhead	$ 42
- Plant supplies used	$ 12
- Plant Utilities	$ 36
- Indirect manufacturing material	$ 60
Total Manufacturing Overhead		$ 252
Total Manufacturing costs			$ 757
Total Cost of work in process			$ 767
Less: Ending Work in process			($ 5)
Cost of Goods manufactured			$ 762

Statement of Cost of Goods Sold (in $ millions )
Beginning Finished goods	$ 70
Cost of goods manufactured	$ 762
Cost of goods available for sale	$ 832
Less: Ending Finished goods inventory	($ 55)
Cost of Goods sold	$ 777

Income Statement (in $ millions )
Revenues :
-Sales Revenues	$ 1,140
Less: Cost of goods sold	($ 777 )
Gross Profit	$ 363
Less: Operating Expenses
- Marketing distribution and customer service costs	($ 288)
Net Operating Income	$ 75