Question

Calculate

5 Ex-1. The December 31, 2017 ledger account balances are presented below for Heins Company: Sales Insurance on production inventories Factory supervision Indirect materials Office equipment depreciation Employee benefit costs (60% of which is for factory employees) Delivery expense for finished products Direct labor Direct materials Office fire insurance Finished goods inventory Indirect labor Administrative and marketing salaries Factory property tax Advertising Production equipment lease cost Work in process inventory 894.000 9.000 56.000 6.000 9.000 45.000 5.000 148.000 123.000 3.300 65.000 13.000 154.000 19.000 19.000 44.000 78.000 24 26 Beginning inventories on January 1, 2017 were $47,000 for finished goods inventory and $62,000 for work in process inventory. 27 29 Required: Compute for the amount of: 1. Total manufacturing overhead costs. 2. Total current period manufacturing costs. 3. Cost of goods manufactured 4. Goods available for sale. 5. Cost of goods sold. 6. Net income for year 2017.

Answer 1

1	Total manufacturing overhead costs	174000
2	Total current period manufacturing costs	445000
3	Cost of goods manufactured	429000
4	Goods available for sale	476000
5	Cost of goods sold	411000
6	Net income for year 2017	274700

Working:

Direct materials		123000
Direct labor		148000
Manufacturing overheads:
Insurance on production inventories	9000
Factory supervision	56000
Indirect materials	6000
Employee benefit costs (60% x $45000)	27000
Indirect labor	13000
Factory property tax	19000
Production equipment lease cost	44000	174000
Total current period manufacturing costs			445000
Add: Beginning work in process			62000
Total cost of work in process			507000
Less: Ending work in process			78000
Cost of goods manufactured $			429000
Add: Beginning finished goods			47000
Cost of goods available for sale			476000
Less: Ending finished goods			65000
Cost of goods sold $			411000

Sales		894000
Cost of goods sold		411000
Gross profit		483000
Less Operating expenses:
Office equipment depreciation	9000
Employee benefit costs (40% x $45000)	18000
Deivery expense	5000
Office fire insurance	3300
Administrative and marketing salaries	154000
Advertising	19000	208300
Net income $		274700