Question

The following information pertains to Flaxman Manufacturing Company for March 2018. Assume actual overhead equaled applied overhead. March 1 Inventory balances Raw materials Work in process Finished goods $123,600 119,900 76,300 00 5529 Мarch 31 Inventory balances Raw materials $86,200 145,700 80,400 Work in process Finished goods During March Costs of raw materials purchased Costs of direct labor $118,500 101,800 62,500 360,000 Costs of manufacturing overhead Sales revenues Required a. Prepare a schedule of cost of goods manufactured and sold. FLAXMAN MANUFACTURING COMPANY Schedule of Cost of Goods Manufactured and Sold For March 2018 Beginning raw materials inventory Raw materials available for use Beginning work in process inventory Direct raw materials used 0 0 Total manufacturing costs 0 Total work in process inventory 0 Cost of goods manufactured 0 Cost of goods available for sale 0 Cost of goods sold b. Calculate the amount of gross margin on the income statement 17

Answer 1

Ans. A	FLAX MAN MANUFACTURING COMPANY
	Schedule of Cost of Goods Manufactured and Sold
	For March 2018
	Particulars	Amount	Amount
	Direct materials:
	Beginning raw materials inventory	$123,600
	Add: Purchase of direct materials	$118,500
	Raw materials available	$242,100
	Less: Ending raw materials inventory	-$86,200
	Direct materials used		$155,900
	Direct labor		$101,800
	Manufacturing overhead applied		$62,500
	Total manufacturing costs		$320,200
	Add: Beginning work in process inventory		$119,900
	Total work in process inventory		$440,100
	Less: Ending Work in process inventory		-$145,700
	Cost of goods manufactured		$294,400
	Add: Beginning finished goods inventory		$76,300
	Cost of goods available for sale		$370,700
	Less: Ending finished goods inventory		-$80,400
	Cost of goods sold		$290,300
Ans. B	FLAX MAN MANUFACTURING COMPANY
	Income Statement (partial)
	For March 2018
	Particulars	Amount	Amount
	Sales revenue		$360,000
	Less: Cost of goods sold		-$290,300
	Gross margin		$69,700