Question

18) The following costs & inventory data were taken from the accounts of Gee Company for 2017: January 1, 2017 December 31, 2017 Inventories: Raw materials Work in process Finished goods $ 9,000 16,000 15,000 $ 6,000 14,000 10,000 Costs incurred during 2017: Raw materials purchases Direct labor Factory rent Factory utilities Indirect materials Indirect labor Selling & administrative expenses $87,000 40,000 8,400 10,100 4,300 8,700 16,000 Instructions a. Prepare a schedule showing the amount of direct materials used in production during the year. b. Compute the amount of manufacturing overhead incurred during the year. c. Prepare a schedule of Cost of Goods Manufactured for Gee Company for the year ended December 31, 2017 in good form (including the proper heading) d. Prepare the Cost of Goods Sold section of the Income Statement for Gee Company for the year ended December 31, 2017 in good form (including the proper heading)

Answer 1

Requirement (1) Direct Materials Used In Production : Particulars Amount Raw Materials, January 1, 2017 $ 9,000 Add : Raw Material Purchases $87,000 Direct Materials Available for Use $ 96,000 Less : Raw Materials, December 31, 2017 $ 6,000 Direct Materials Used In Production $ 90,000 $ 16,000 Requirement (2) Manufacturing Overhead Incurred: Particulars Factory Rent Factory Utilities Indirect Materials Indirect Labour Manufacturing Overhead Incurred Requirement (3) Gee Company Schedule of Cost of Goods Manufactured For the Year Ended December 31, 2017 Work in Process, January 1,2017 Direct Materials; Raw Materials, January 1, 2017 $ 9,000 Add: Raw Material Purchases $ 87,000 Direct Materials Available for Use $ 96,000 Less : Raw Materials, December 31, 2017 $ 6,000 Direct Materials Used In Production Direct Labour Manufacturing Overhead Total Manufacturing Costs Manufacturing Costs to Account for Less : Work in process, December 31, 2017 Cost of goods Manufactured $ $ 90,000 40,000 31,500 Amount $ 8,400 $ 10,100 $ 4,300 $ 8,700 $ 31,500 $ 161,500 $ 177,500 $ 14,000 $ 163,500 Requirement (4) Gee Company Schedule of Cost of goods sold For the Year Ended December 31, 2017 Finished goods inventory, January 1, 2017 $ Add : Cost of goods Manufactured $ Goods Available for Sale $ Less : Finished goods Inventory, December 31, 2017 Cost of goods sold $ 15,000 163,500 178,500 10,000 168,500 Note : Do Comment For Any Further Assistance