Question

Consider the following account balances​ (in thousands) for the Carolina ​Corporation:

REQUIREMENTS

1. Prepare a schedule for the cost of goods manufactured for 2017

2. Revenues (in thousands) for 2017 were $1,300,000. Prepare the income statement for 2017.

Beginning of End of Carolina Corporation Direct materials inventory Work-in-process inventory Finished-goods inventory Purchases of direct materials Direct manufacturing labor Indirect manufacturing labor Plant insurance Depreciation-plant, building, and equipment Plant utilities Repairs and maintenance-plant Equipment leasing costs Marketing, distribution, and customer-service costs General and administrative costs 2017 2017 124,000 $ 73,000 145,000 206,000 262,000 217,000 97,000 9,000 45,000 26,000 12,000 65,000 125,000 71,000 173,000 240,000

Answer 1

Carolina corporation
Cost of Goods Manufactured
For the year ended December 31, 2017
Beginning Work in process			$ 1,73,000.00
Direct materials used
Raw material Inventory Beginning	$ 1,24,000.00
Raw material Purchased	$ 2,62,000.00
Raw material available for use	$ 3,86,000.00
Less: Raw material Inventory Ending	$      73,000.00
Direct Material Used		$    3,13,000.00
Direct labor		$    2,17,000.00
Manufacturing Overheads
Depreciation plant building and equipment	$      45,000.00
Insurance on plant	$        9,000.00
Plant utilities	$      26,000.00
Indirect labor	$      97,000.00
Repair and maintenance plant	$      12,000.00
Equipment leasing cost	$      65,000.00
Total Manufacturing Overheads		$    2,54,000.00
Total manufacturing cost incurred during the year			$ 7,84,000.00
Total manufacturing cost to account for			$ 9,57,000.00
Less: Ending WIP inventory			$ 1,45,000.00
Cost of goods manufactured			$ 8,12,000.00

Carolina corporation
Income Statement
For the Year ended december 31 2017
Sales Revenue		$   13,00,000.00
Cost of Goods sold
Beginning Finished Goods Inventory	$      2,40,000.00
Cost of Goods Manufactured	$      8,12,000.00
Goods available for sale	$   10,52,000.00
Less :Ending Finished goods Inventory	$      2,06,000.00
Cost of Goods sold		$      8,46,000.00
Gross Margin		$      4,54,000.00
Operating Expenses
general and administrative expenses	$         71,000.00
Marketing , distribution and customer service cost	$      1,25,000.00
Total Operating expenses		$      1,96,000.00
Operating Profit		$      2,58,000.00