Question

Manufacturing Income Statement, Statement of Cost of Goods Manufactured Several items are omitted from the income statement and cast of goods manufactured statement data for two different companies for the month of December On Off Company Company Materials inventory, December 1 $86,210 $110,320 Materials inventory, December 31 (a) 124,720 Materials purchased 219,900 (a) Cost of direct materials used in production 250,110 (b) Direct labor 325,030 248,280 Factory overhead 100,890 123,590 Total manufacturing costs incurred in December (6) 713.885 Total manufacturing costs 841,550 979.825 Work in process inventory, December 1 165,520 265,940 Work in process inventory, December 31 139.630 (c) Cost of goods manufactured (0) 707270 Finished goods inventory. December 1 145.690 124,570 Finished goods inventory, December 31 152,550 (d) Sales 1.270,720 1,103.520 Cost of goods sold 714,860 Gross profit () Operating expenses 165.500 04 Net Income 244,120 Required:

Answer 1

Answer 1.

On Company:

Cost of direct materials used in production = Materials inventory, December 1 + Materials purchased - Materials inventory, December 31
$250,110 = $86,210 + $218,900 - Materials inventory, December 31
Materials inventory, December 31 = $55,000

Total manufacturing costs incurred in December = Cost of direct materials used in production + Direct labor + Factory overhead
Total manufacturing costs incurred in December = $250,110 + $325,030 + $100,890
Total manufacturing costs incurred in December = $676,030

Cost of goods manufactured = Total manufacturing costs - Work in process inventory, December 31
Cost of goods manufactured = $841,550 - $139,630
Cost of goods manufactured = $701,920

Cost of goods sold = Finished goods inventory, December 1 + Cost of goods manufactured - Finished goods inventory, December 31
Cost of goods sold = $145,690 + $701,920 - $152,550
Cost of goods sold = $695,060

Gross profit = Sales - Cost of goods sold
Gross profit = $1,270,720 - $695,060
Gross profit = $575,660

Net income = Gross profit - Operating expenses
Net income = $575,660 - $165,500
Net income = $410,160

Off Company:

Total manufacturing costs incurred in December = Cost of direct materials used in production + Direct labor + Factory overhead
$713,885 = Cost of direct materials used in production + $248,280 + $123,590
Cost of direct materials used in production = $342,015

Cost of direct materials used in production = Materials inventory, December 1 + Materials purchased - Materials inventory, December 31
$342,015 = $110,320 + Materials purchased - $124,720
Materials purchased = $356,415

Cost of goods manufactured = Total manufacturing costs - Work in process inventory, December 31
$707,270 = $979,825 - Work in process inventory, December 31
Work in process inventory, December 31 = $272,555

Cost of goods sold = Finished goods inventory, December 1 + Cost of goods manufactured - Finished goods inventory, December 31
$714,860 = $124,570 + $707,270 - Finished goods inventory, December 31
Finished goods inventory, December 31 = $116,980

Gross profit = Sales - Cost of goods sold
Gross profit = $1,103,520 - $714,860
Gross profit = $388,660

Net income = Gross profit - Operating expenses
$244,120 = $388,660 - Operating expenses
Operating expenses = $144,540

Answer 2.

$ 165,520 On Company Statement of Cost of Goods Manufactured For the Month Ended December 31 Work in process inventory, December 1 Direct materials: Materials inventory, December 1 $ 86,210 Purchases $ 218,900 Cost of materials available for use $ 305,110 Less materials inventory, December 31 $ 55,000 Cost of direct materials used in production Direct labor Factory overhead Total manufacturing costs incurred during December Total manufacturing costs Less work in process inventory, December 31 Cost of goods manufactured $ $ $ 250,110 325,030 100,890 $ $ $ $ 676,030 841,550 139,630 701,920 $ 1,270,720 On Company Income Statement For the Month Ended December 31 Sales Cost of goods sold: Finished goods inventory, December 1 $ Cost of goods manufactured $ Cost of finished goods available for sale $ Less finished goods inventory, December 31 $ Cost of goods sold Gross profit Operating expenses 145,690 701,920 847,610 152,550 $ $ $ $ 695,060 575,660 165,500 410,160 Net income