Question

Raw materials beginning and ending balances were $30,000 and 35,000 respectively. Company purchased $76,000 of additional raw materials during the year, and the company’s work in process had a beginning balance of $17,000 and an ending balance of $9,000. Murray’s company incurred $145,000 of administrative expenses and $57,205 in selling costs during the year. The company had direct labor costs of $81,000, and it incurred actual manufacturing overhead costs of $42,000. There were $5,500 worth of indirect materials used for production this year, and $44,000 worth of manufacturing overhead was applied to work in process. The company began the year with $42,100 worth of goods in its finished goods inventory and $38,000 of goods at the end of the year. The company sold $403,893 last year, but the tax rate is 27% and had to pay $950 in interest expense. Is the company doing well?

Create...

1) Schedule of Cost of Goods Manufactured

2) Schedule of Cost of Goods Sold

3) Traditional Income Statement

Please be dynamic and include formulas, thanks...

Answer 1

1) Schedule of Cost of Goods Manufactured

Description	Amount	Amount
Raw Materials, Beginning	30,000
Add:- Purchased Raw Material	76,000
Less:- Raw Material, Ending	(35,000)
Raw Materials used in Production		$71,000
Add:- Direct Labor	81,000
Manufacturing Overhead	42,000
Indirect Material used in Production	5,500
Manufacturing Overhead applied to work in process	44,000
Total Manufacturing Cost		$243,500
Add:- Work in Process, Beginning	17,000
Less:- Work in Process, Ending	(9,000)
Cost of Goods Manufactured		$251,500

2) Schedule of Cost of Goods Sold

Description	Amount	Amount
Cost of Goods Manufactured	$251,500
Add:- Finished Goods, Beginning	42,100
Less:- Finished Goods, Ending	(38,000)
Cost of Goods Sold		$255,600

3) Traditional Income Statement

Accounts Title	Amount	Amount
Sales	403,893
Less:- Cost of Goods Sold	(255,600)
Gross Income		$148,293
Less:- Expenses
Administrative Expenses	145,000
Selling Expenses	57,205
Interest Expenses	950
Total Expenses		($203,155)
Net Loss		($54,862)

Company is not doing well. Company carry loss of $54,862. Which shows Company's Sales less than its Expenses. To cover its losses company needs to increase its Sales.