Question

Indicate the missing amount for each letter.

		Case
		1			2
Direct materials used		$10,050			$enter a dollar amount	(g)
Direct labor		5,870			8,150
Manufacturing overhead		8,620			4,820
Total manufacturing costs		enter a dollar amount	(a)		16,130
Beginning work in process inventory		1,270			enter a dollar amount	(h)
Ending work in process inventory		enter a dollar amount	(b)		3,200
Sales revenue		25,080			enter a dollar amount	(i)
Sales discounts		2,840			2,130
Cost of goods manufactured		17,740			22,680
Beginning finished goods inventory		enter a dollar amount	(c)		4,020
Goods available for sale		23,020			enter a dollar amount	(j)
Cost of goods sold		enter a dollar amount	(d)		enter a dollar amount	(k)
Ending finished goods inventory		4,390			3,180
Gross profit		enter a dollar amount	(e)		7,670
Operating expenses		2,990			enter a dollar amount	(l)
Net income		enter a dollar amount	(f)		5,400

Answer 1

All these missing figures are identified by using the general equations given as follows:

Total manufacturing costs = Direct materials used + Direct labor + Manufacturing overhead

Cost of goods manufactured = Beginning work in process inventory + Total manufacturing costs - Ending work in process inventory

Cost of goods available for sale = Beginning finished goods inventory + Cost of goods manufactured

Cost of goods sold = Cost of goods available for sale - Ending finished goods inventory

Net sales = Sales - Sales discounts

Gross profit = Net sales - Cost of goods sold

Net income = Gross profit - Operating expenses

Workings:

a) Total manufacturing costs = Direct materials used + Direct labor + Manufacturing overhead = $10,050 + $5,870 + $8,620 = $24,540

b) Ending work in process inventory = Total manufacturing costs + Beginning work in process inventory - Cost of goods manufactured = $24,540 + $1,270 - $17,740 = $8,070

c) Beginning finished goods inventory = Cost of goods available for sale - Cost of goods manufactured = $23,020 - $17,740 = $5,280

d) Cost of goods sold = Cost of goods available for sale - Ending finished goods inventory = $23,020 - $4,390 = $18,630

e) Gross profit = Net Sales - Cost of goods sold

Net sales = Sales revenue - Sales discounts = $25,080 - $2,840 = $22,240
Cost of goods sold = $18,630

Gross profit = $22,240 - $18,630 = $3,610

f) Net income = Gross profit - Operating expenses = $3,610 - $2,990 = $620

g) Direct materials used = Total manufacturing costs - (Direct labor + Manufacturing overhead) = $16,130 - ($8,150 + $4,820) = $3,160

h) Beginning work in process inventory = Cost of goods manufactured + Ending work in process inventory - Total manufacturing costs = $22,680 + $3,200 - $16,130 = $9,750

i) Sales revenue = Gross profit + Sales discount + Cost of goods sold = $7,670 + $2,130 + $23,520 = $33,320

j) Goods available for sale = Cost of goods manufactured + Beginning finished goods inventory = $22,680 + $4,020 = $26,700

k) Cost of goods sold = Goods available for sale - Ending finished goods inventory = $26,700 - $3,180 = $23,520

l) Operating expenses = Gross profit - Net income = $7,670 - $5,400 = $2,270