Question

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	$70,880		$93,560
Materials inventory, December 31	(a)		105,720
Materials purchased	180,040		(a)
Cost of direct materials used in production	189,960		(b)
Direct labor	267,220		210,510
Factory overhead	82,930		104,790
Total manufacturing costs incurred in December	(b)		605,330
Total manufacturing costs	676,200		676,200
Work in process inventory, December 1	136,090		225,480
Work in process inventory, December 31	114,830		(c)
Cost of goods manufactured	(c)		599,720
Finished goods inventory, December 1	119,790		104,790
Finished goods inventory, December 31	125,460		(d)
Sales	1,044,770		935,600
Cost of goods sold	(d)		605,330
Gross profit	(e)		(e)
Operating expenses	136,090		(f)
Net income	(f)		207,700

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.	$	$
b.	$	$
c.	$	$
d.	$	$
e.	$	$
f.	$	$

Answer 1

Solution:

	ON COMPANY
	Cost of Goods Manufactured Schedule
	Work in Process Inventory, Opening			136090
	DIRECT MATERIALS
	Raw Materials Inventory Opening	70880
	Raw Material Purchases	180040
	Total Raw Materials Available for use	250920
(a)	Less: Raw Materials Inventory, Ending	60960	189960
	Direct Materials Used in production		189960
	DIRECT LABOR		267220
	MANUFACTURING OVERHEADS		82930
(b)	Total Manufacturing Costs incurred in Decemeber			540110
	Total Manufcturing Cost			676200
	Less: Work in Process Inventory, Ending			114830
©	Cost of Goods Manufactured			561370
	Cost of Goods Sold Schedule
	Finished goods, Beginning		119790
	Cost of goods manufactured		5,61,370
	Cost of goods available for sale		6,81,160
	Finished goods, May 31		1,25,460
(d)	Cost of goods sold		5,55,700
	Income Statement
	Sales	1044770
	Less: Cost of Goods Sold	5,55,700
(e)	Gross Profit	489070
	Less:
	Operating Expenses	136090
(F)	Net Operating Income	352980

	OFF COMPANY
	Cost of Goods Manufactured Schedule
	Work in Process Inventory, Opening			225480
	DIRECT MATERIALS
	Raw Materials Inventory Opening	93560
(a)	Raw Material Purchases	302190
	Total Raw Materials Available for use	395750
	Less: Raw Materials Inventory, Ending	105720
(b)	Direct Materials Used		290030
	DIRECT LABOR		210510
	MANUFACTURING OVERHEADS		104790
	Total Manufacturing Costs			605330
	Total Cost of Work in Process			830810
(c)	Less: Work in Process Inventory, Ending			231090
	Cost of Goods Manufactured			599720
	Cost of Goods Sold Schedule
	Finished goods, Beginning		104790
	Cost of goods manufactured		5,99,720
	Cost of goods available for sale		7,04,510
(d)	Finished goods, May 31		99,180
	Cost of goods sold		6,05,330
	Income Statement
	Sales	935600
	Less: Cost of Goods Sold	6,05,330
(e)	Gross Profit	330270
	Less:
(F)	Operating Expenses	122570
	Net Operating Income	207700

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