Question

1. Manufacturing Income Statement, Statement of Cost of Goods Manufactured

   Several items are omitted from the income statement and cost of goods manufactured statement data for two different companies for the month of December.

   	On Company		Off Company
   Materials inventory, December 1	$76,840		$102,970
   Materials inventory, December 31	(a)		116,360
   Materials purchased	195,170		(a)
   Cost of direct materials used in production	205,930		(b)
   Direct labor	289,690		231,680
   Factory overhead	89,900		115,330
   Total manufacturing costs incurred in December	(b)		666,220
   Total manufacturing costs	733,050		914,380
   Work in process inventory, December 1	147,530		248,160
   Work in process inventory, December 31	124,480		(c)
   Cost of goods manufactured	(c)		660,040
   Finished goods inventory, December 1	129,860		115,330
   Finished goods inventory, December 31	136,010		(d)
   Sales	1,132,620		1,029,700
   Cost of goods sold	(d)		666,220
   Gross profit	(e)		(e)
   Operating expenses	147,530		(f)
   Net income	(f)		228,590

   Required:

   1. Determine the amounts of the missing items, identifying them by letter. Enter all amounts as positive numbers.

   Letter	On Company	Off Company
   a.	$fill in the blank 33b330f92fb1072_1	$fill in the blank 33b330f92fb1072_2
   b.	$fill in the blank 33b330f92fb1072_3	$fill in the blank 33b330f92fb1072_4
   c.	$fill in the blank 33b330f92fb1072_5	$fill in the blank 33b330f92fb1072_6
   d.	$fill in the blank 33b330f92fb1072_7	$fill in the blank 33b330f92fb1072_8
   e.	$fill in the blank 33b330f92fb1072_9	$fill in the blank 33b330f92fb1072_10
   f.	$fill in the blank 33b330f92fb1072_11	$fill in the blank 33b330f92fb1072_12

   2. Prepare On Company's statement of cost of goods manufactured for December.

   On Company
   Statement of Cost of Goods Manufactured
   For the Month Ended December 31
   			$fill in the blank e2405308c076f99_2
   Direct materials:
   	$fill in the blank e2405308c076f99_4
   	fill in the blank e2405308c076f99_6
   	$fill in the blank e2405308c076f99_8
   	fill in the blank e2405308c076f99_10
   		$fill in the blank e2405308c076f99_12
   		fill in the blank e2405308c076f99_14
   		fill in the blank e2405308c076f99_16
   Total manufacturing costs incurred			fill in the blank e2405308c076f99_17
   Total manufacturing costs			$fill in the blank e2405308c076f99_18
   			fill in the blank e2405308c076f99_20
   			$fill in the blank e2405308c076f99_22

   3. Prepare On Company's income statement for December.

   On Company
   Income Statement
   For the Month Ended December 31
   		$fill in the blank a97bcefff044f83_2
   Cost of goods sold:
   	$fill in the blank a97bcefff044f83_4
   	fill in the blank a97bcefff044f83_6
   	$fill in the blank a97bcefff044f83_8
   	fill in the blank a97bcefff044f83_10
   		fill in the blank a97bcefff044f83_12
   		$fill in the blank a97bcefff044f83_14
   		fill in the blank a97bcefff044f83_16
   		$fill in the blank a97bcefff044f83_18

Answer 1

Answer 1.

On Company:

Cost of direct materials used in production = Materials inventory, December 1 + Materials purchased - Materials inventory, December 31
$205,930 = $76,840 + $195,170 - Materials inventory, December 31
Materials inventory, December 31 = $66,080

Total manufacturing costs incurred in December = Cost of direct materials used in production + Direct labor + Factory overhead
Total manufacturing costs incurred in December = $205,930 + $289,690 + $89,900
Total manufacturing costs incurred in December = $585,520

Cost of goods manufactured = Total manufacturing costs - Work in process inventory, December 31
Cost of goods manufactured = $733,050 - $124,480
Cost of goods manufactured = $608,570

Cost of goods sold = Finished goods inventory, December 1 + Cost of goods manufactured - Finished goods inventory, December 31
Cost of goods sold = $129,860 + $608,570 - $136,010
Cost of goods sold = $602,420

Gross profit = Sales - Cost of goods sold
Gross profit = $1,132,620 - $602,420
Gross profit = $530,200

Net income = Gross profit - Operating expenses
Net income = $530,200 - $147,530
Net income = $382,670

Off Company:

Total manufacturing costs incurred in December = Cost of direct materials used in production + Direct labor + Factory overhead
$666,220 = Cost of direct materials used in production + $231,680 + $115,330
Cost of direct materials used in production = $319,210

Cost of direct materials used in production = Materials inventory, December 1 + Materials purchased - Materials inventory, December 31
$319,210 = $102,970 + Materials purchased - $116,360
Materials purchased = $332,600

Cost of goods manufactured = Total manufacturing costs - Work in process inventory, December 31
$660,040 = $914,380 - Work in process inventory, December 31
Work in process inventory, December 31 = $254,340

Cost of goods sold = Finished goods inventory, December 1 + Cost of goods manufactured - Finished goods inventory, December 31
$666,220 = $115,330 + $660,040 - Finished goods inventory, December 31
Finished goods inventory, December 31 = $109,150

Gross profit = Sales - Cost of goods sold
Gross profit = $1,029,700 - $666,220
Gross profit = $363,480

Net income = Gross profit - Operating expenses
$228,590 = $363,480 - Operating expenses
Operating expenses = $134,890

Answer 2.

Answer 3.