Problem

Mayville Company, a sole proprietorship, reports the following information pertaining to i...

Mayville Company, a sole proprietorship, reports the following information pertaining to its operating activities:

 

  Ending

  Balance

  Beginning

  Balance

Materials Inventory 

$ 20,00

$ 40,000

Work in Process Inventory

29,000

60,000

Finished Goods Inventory

52,000

42,000

During the year, the company purchased $30,000 of direct materials and incurred $21,000 of direct labor costs. Total manufacturing overhead costs for the year amounted to $18,000. Selling and administrative expenses amounted to $60,000, and the company’s annual sales amounted to $200,000.

a. Prepare Mayville’s schedule of the cost of finished goods manufactured.


b. Prepare Mayville’s income statement (ignore income taxes).

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