Question

Lumpled by less than 2 or more than 3 students will not be accepted East Manufacturing Company is a manufacturer that produces a single product. The following information has been taken from the company's production, sales, and cost records for the month of January 2020. Purchases, raw material 78,000 Maintenance, factory 18,000 Direct labour 135,000 Depreciation, factory equipment 12,500 Indirect Material, factory 6,700 Insurance 3,000 Depreciation, sales equipment 950 Advertising expenses 3,200 Depreciation, administrative office equipment 1,800 Cleaning Supplies, factory 750 Salary expense, Accounting department 13.200 Salary expense, Human Resources 4,000 Salary expense, Sales 5,000 Salary, factory supervisor 3,500 Salary, factory security 2,400 Office supplies 1.200 Depreciation, manufacturing building 1,000 Rent 1,400 250 Property taxes, manufacturing building Utilities' 2,400 Additional information: 1. Insurance, utilities, rent and office supplies should be allocated as follows: Factory Sales 70% Insurance 10% 30% Office supplies 25% Rent 70% 10% Utilities 10% Administration 20% 60% 75% 20% 2. Inventory balances at the beginning and end of January were as follows: January / January 31 22,000 18,000 30,000 35,000 Raw materials Work in process Finished goods 21,000 23,000 (Continued on the reve

Answer 1

Cost of Goods Manufactured:
	Amount $	Amount $	Amount $	Calculations
Op WIP			30000
Add: RM:
Op bal.	18000
Add:Purch.	78000
Total Available	96000
less:Cl bal.	22000
RM used		74000
Direct Lab.		135000
Manuf. Overhead:
Fac Mainte.	18000
Fac Dep.	12500
Ind. Mat.	6700
Insurance	2100			3000*0.7
Cleaning sup.	750
Salary- supervisor	3500
Salary- security	2400
Manuf. Build Dep	1000
Off Supp	120			1200*10%
Manuf Prop tax	250
Utilities	1680			2400*0.7
Total Overheads		49000
Total Manufacturing incurred			258000
Total Work in Process			288000
Less:Cl. WIP			35000
Cost of Goods manufactured			253000
Income Statement:
	Amount $	Amount $
Sales		348000
Less:COGS:
Op FG	21000
Add:COGM	253000
FG available for sale	274000
Less:Cl FG	23000
COGS		251000
Gross profit		97000
Less:Administration exp.:
Insurance	600			3000*0.2
Dep admin equ	1800
Salary accounting	13200
Salary HR	4000
Office Supp	720			1200*0.6
Rent	1050			1400*0.75
Utilities	480			2400*0.2
Total Admin exp.		21850
Income before Selling exp.:		75150
Less:Selling Expenses:
Commission	6960			348000*2%
Insurance	300			3000*0.1
Dep sales equ	950
Advertising	3200
salary sales	5000
Office Supp	360			1200*0.3
Rent	350			1400*0.25
Utilities	240			2400*0.1
Total Selling exp.		17360
Net Operating Income		57790