Question

In: Accounting

On Company Off Company Materials inventory, December 1 $64,830 $85,580 Materials inventory, December 31 (a) 96,710...

On
Company
Off
Company
Materials inventory, December 1 $64,830 $85,580
Materials inventory, December 31 (a) 96,710
Materials purchased 164,670 (a)
Cost of direct materials used in production 173,740 (b)
Direct labor 244,410 192,560
Factory overhead 75,850 95,850
Total manufacturing costs incurred in December (b) 553,700
Total manufacturing costs 618,470 618,470
Work in process inventory, December 1 124,470 206,250
Work in process inventory, December 31 105,020 (c)
Cost of goods manufactured (c) 548,570
Finished goods inventory, December 1 109,560 95,850
Finished goods inventory, December 31 114,750 (d)
Sales 955,590 855,800
Cost of goods sold (d) 553,700
Gross profit (e) (e)
Operating expenses 124,470 (f)
Net income (f) 189,990

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. $ $

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
$
Direct materials:
$
$
$
Total manufacturing costs incurred during December
Total manufacturing costs $
$

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

On Company
Income Statement
For the Month Ended December 31
$
Cost of goods sold:
$
$
$
$

Solutions

Expert Solution

Answer 1.

On Company:

Cost of direct materials used in production = Materials inventory, December 1 + Materials purchased - Materials inventory, December 31
$173,740 = $64,830 + $164,670 - Materials inventory, December 31
Materials inventory, December 31 = $55,760

Total manufacturing costs incurred in December = Cost of direct materials used in production + Direct labor + Factory overhead
Total manufacturing costs incurred in December = $173,740 + $244,410 + $75,850
Total manufacturing costs incurred in December = $494,000

Cost of goods manufactured = Total manufacturing costs - Work in process inventory, December 31
Cost of goods manufactured = $618,470 - $105,020
Cost of goods manufactured = $513,450

Cost of goods sold = Finished goods inventory, December 1 + Cost of goods manufactured - Finished goods inventory, December 31
Cost of goods sold = $109,560 + $513,450 - $114,750
Cost of goods sold = $508,260

Gross profit = Sales - Cost of goods sold
Gross profit = $955,590 - $508,260
Gross profit = $447,330

Net income = Gross profit - Operating expenses
Net income = $447,330 - $124,470
Net income = $322,860

Off Company:

Total manufacturing costs incurred in December = Cost of direct materials used in production + Direct labor + Factory overhead
$553,700 = Cost of direct materials used in production + $192,560 + $95,850
Cost of direct materials used in production = $265,290

Cost of direct materials used in production = Materials inventory, December 1 + Materials purchased - Materials inventory, December 31
$265,290 = $85,580 + Materials purchased - $96,710
Materials purchased = $276,420

Cost of goods manufactured = Total manufacturing costs - Work in process inventory, December 31
$548,570 = $618,470 - Work in process inventory, December 31
Work in process inventory, December 31 = $69,900

Cost of goods sold = Finished goods inventory, December 1 + Cost of goods manufactured - Finished goods inventory, December 31
$553,700 = $95,850 + $548,570 - Finished goods inventory, December 31
Finished goods inventory, December 31 = $90,720

Gross profit = Sales - Cost of goods sold
Gross profit = $855,800 - $553,700
Gross profit = $302,100

Net income = Gross profit - Operating expenses
$189,990 = $302,100 - Operating expenses
Operating expenses = $112,110

Answer 2.

Answer 3.


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