Question

Manufacturing Income Statement, Statement of Cost of Goods Manufactured Several items are omitted from the income statement and cost of goods manufactured statement data for two different companies for the month of December On Company Off Company $89,560 $114,640 (a) 129,540 (a) 227.480 240,020 (b) 257,940 Materials inventory, December 1 Materials inventory, December 31 Materials purchased Cost of direct materials used in production Direct labor Factory overhead Total manufacturing costs incurred December Total manufacturing costs Work in process inventory, December 1 Work in process inventory, December 31 Cost of goods manufactured Finished goods inventory, December 1 Finished goods inventory, December 31 Sales Cost of goods sold 337,640 104,790 (b) 854,410 171.960 128,400 741,720 1,018,000 276,280 (c) 145,090 (c) 734,840 128,400 (d) 151,360 158,520 1,320,110 (d) 1,146,400 741,720

Answer 1

For Off Company: $741,720 1) For On Company: Materials inventory, December 1 Materials purchased Materials available for production Less: Cost of DM used in production a) Materials inventory, December 31 Cost of goods manufactured Finished goods, December 1 Cost of goods available for sales Less: Cost of goods sold d) Finished goods, December 31 $734,840 $128,400 $863,240 $741,720 $121,520 $257,940 $128,400 $355,380 $129,540 $484,920 $114,640 $370,280 Sales Less: Cost of goods sold e) Gross profit Less: Net income f) Operating expenses $1,146,400 $741,720 $404,680 -$254,500 $150,180 $89,560 Total mfg. costs incurred in December $227,480 Less: $317,040 Direct labor -$240,020 Factory overhead $77,020 b) Cost of DM used in production Add: Materials inventory, December 31 $240,020 Materials available for production $337,640 Less: Materials inventory, December 1 $104,790 a) Materials purchased $682,450 $171,960 Total manufacturing costs $854,410 Less: Cost of goods manufactured -$145,090 c) Work in process, December 31 $709,320 $151,360 $860,680 $158,520 $702,160 $1,320,110 $617,950 ($1320110 - $702160] $171,960 $445,990 Cost of DM used in production Direct labor Factory overhead b) Total mfg. costs incurred in December Add: Work in process, December 1 Total manufacturing costs Less: Work in process, December 31 c) Cost of goods manufactured Add: Finished goods, December 1 Cost of goods available for sale Less: Finished goods, December 31 d) Cost of goods sold Sales e) Gross profit Less: Operating expenses f) Net income $1,018,000 $734,840 $283,160

2) 3) $171,960 $1,320,110 On Company Schedule of Cost of Goods Manufactured For the Month Ended December 31 Work in Process, December 1 Direct Materials used: Direct Materials, December 1 $89,560 Add: Purchases of direct materials $227,480 Total Direct Materials available $317,040 Less: Direct Materials, December 31 $77,020 Direct Materials used in the production $240,020 Direct manufacturing labor $337,640 Factory overhead $104,790 Manufacturing Cost incurred during the year Total Manufacturing Costs Less: Work in Process, December 31 Cost of Goods Manufactured On Company Income Statement For the Month Ended December 31 Sales Cost of Goods Sold: Finished Goods, December 1 $151,360 Add: Cost of Goods Manufactured $709,320 Cost of Goods Available for Sale $860,680 Less: Finished Goods, December 31 -$158,520 Cost of Goods Sold Gross Profit Less: Operating Expenses Net income [As per schedule prepared above] -$702,160 $617,950 $171,960 $445,990 $682,450 $854,410 $145,090 $709,320