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
Materials inventory, December 1	$58,750		$78,730
Materials inventory, December 31	(a)		88,960
Materials purchased	149,230		(a)
Cost of direct materials used in production	157,450		(b)
Direct labor	221,490		177,140
Factory overhead	68,740		88,180
Total manufacturing costs incurred in December	(b)		509,380
Total manufacturing costs	560,480		699,120
Work in process inventory, December 1	112,800		189,740
Work in process inventory, December 31	95,180		(c)
Cost of goods manufactured	(c)		504,660
Finished goods inventory, December 1	99,290		88,180
Finished goods inventory, December 31	103,990		(d)
Sales	865,980		787,300
Cost of goods sold	(d)		509,380
Gross profit	(e)		(e)
Operating expenses	112,800		(f)
Net income	(f)		174,780

Required:

1. Determine the amounts of the missing items, identifying them by letter. Enter all amounts as positive numbers.

Letter	On Company	Off Company
a.	$	$
b.	$	$
c.	$	$
d.	$	$
e.	$	$
f.	$	$

2. Prepare On Company's statement of cost of goods manufactured for December.

On Company
Statement of Cost of Goods Manufactured
For the Month Ended December 31
			$
Direct materials:
	$
	$
		$
Total manufacturing costs incurred during December
Total manufacturing costs			$
			$

3. Prepare On Company's income statement for December.

On Company
Income Statement
For the Month Ended December 31
		$
Cost of goods sold:
	$
	$
		$
		$

Answer 1

Answer to Part 1 Off Compan 254290 244060 194460 83460 277920 103140 Letter On Company 50530 447680 465300 460600 405380 292580 C.

Answer to Part 2 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 Add: Material Purchased Cost of Goods available for use Less: Material Inventory, December 31 Cost of Direct Materials used in Production Direct Labor Factory Overhead Total Manufacturing Costs incurred in December Total Manufacturing Costs Less: Work in Process Inventory, December 31 Cost of Goods Manufactured 112800 58750 149230 207980 50530 157450 221490 68740 447680 560480 95180 465300

Answer to Part 3 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 Net Income 865980 99290 465300 564590 103990 460600 405380 112800 292580

Answer to Part 2 OFF 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 Add: Material Purchased Cost of Goods available for use Less: Material Inventory, December 31 Cost of Direct Materials used in Production Direct Labor Factory Overhead Total Manufacturing Costs incurred in December Total Manufacturing Costs Less: Work in Process Inventory, December 31 Cost of Goods Manufactured 189740 78730 254290 333020 88960 244060 177140 88180 509380 699120 194460 504660

Answer to Part 3 OFF 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 Net Income 787300 88180 504660 592840 83460 509380 277920 103140 174780