Question

The following data pertain to Babor Company for the fiscal year ended December 31:

	Prior December 31				Current December 31
Purchases of materials					$	200,000
Direct labor						131,500
Indirect labor						52,000
Factory insurance						9,400
Depreciation—factory						36,500
Repairs and maintenance—factory						15,200
Marketing expenses						148,900
General and administrative expenses						88,100
Materials inventory	$	30,000				65,500
Work-in-Process inventory		16,500				18,800
Finished Goods inventory		18,400				24,400

Sales in the current year were $668,000.

Required:

Prepare a schedule of cost of goods manufactured and an income statement for the current year for Babor Company.

Complete this question by entering your answers in the tabs below.

• Stmt of COGM
• Income Statement

Prepare a schedule of cost of goods manufactured for the current year for Babor Company.

	Babor Company Statement of Cost of Goods Manufactured For the Year Ended December 31 Direct materials Materials available Direct materials used Factory overhead Total factory overhead Total manufacturing costs Total manufacturing costs to account for Cost of goods manufactured

Answer 1

Prepare a schedule of cost of goods manufactured for the current year for Babor Company.

Babor Company Statement of Cost of Goods Manufactured For the Year Ended December 31 Direct materials Beginning raw material 30000 Raw material purchase 200000 Materials available 230000 Less: Ending raw material -65500 Direct materials used 164500 Direct labor 131500 Factory overhead Indirect labor 52000 Factory insurance 9400 Depreciation—factory 36500 Repairs and maintenance—factory 15200 Total factory overhead 113100 Total manufacturing costs 409100 Beginning work in process 16500 Total manufacturing costs to account for 425600 Less: Ending work in process -18800 Cost of goods manufactured 406800

Income statement

Sales		668000
Cost of goods sold
Beginning finished goods	18400
Cost of goods manufactured	406800
Cost of goods available for sale	425200
Less: Ending Finished goods	-24400
Cost of goods sold		400800
Gross profit		267200
Operating expense
Marketing expense	148900
General and administrative expenses	88100
Total operating expense		237000
Net income		30200