Question

Saved E2-10 (Algo) Preparing Cost of Goods Manufactured and Income Statement [LO 2-6] Manufacturing costs for Davenport Company during 2018 were as follows: Beginning Finished Goods, 1/1/18 Beginning Raw Materials, 1/1/18 Beginning Work in Process, 1/1/18 Direct Labor for 2018 Ending Finished Goods, 12/31/18 Ending Raw Materials, 12/31/18 Ending Work in Process, 12/31/18 Material Purchases for 2018 (including $22,500 of indirect material) $ 25,600 37,000 111,800 $ 276,800 23,900 41,080 122, 100 305,700 Note: The pre-determined overhead rate is 0.90 (90%) of direct labor cost. Required: 1. Prepare a Cost of Goods Manufactured report 2. Prepare a Partial Income Statement if sales revenue was $1,400,000 and operating expenses were $285,000 for 2018. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Dronare a rnet of Gave Manufacturer rennt

Answer 1

Requirement 1:

DAVENPORT COMPANY
Cost of Goods Manufactured Report
For the Year 2018
Beginning Raw Materials, 1/1/18	$37,000
Direct Material purchases [305,700-22,500]	$283,200
Less: Ending Raw Materials, 12/31/18	($41,000)
Direct materials Used in Production	$279,200
Direct labor cost	$276,800
Manufacturing overhead [276,800 x 0.90]	$249,120
Total current manufacturing costs	$805,120
Add: Beginning work in process, 1/1/18	$111,800
(less): Ending work in process, 12/31/18	($122,100)
Cost of goods manufactured	$794,820

Requirement 2:

DAVENPORT COMPANY
Income Statement
For the Year 2018
Sales revenue		$1,400,000
Less: Cost of goods sold
Cost of goods manufactured	$794,820
Add:Beginning finished goods, 1/1/18	$25,600
Cost of goods available for Sale	$820,420
(Less): Ending finished goods	($23,900)
Cost of goods sold		$796,520
Gross profit		$603,480
Operating expenses		$285,000
Net income from operations		$318,480