Question
In: Accounting
XYZ Company manufactured 100,000 units in 20X5 and reported the following costs: Sandpaper $ 32,000 Leasing...
XYZ Company manufactured 100,000 units in 20X5 and reported the following costs:
Sandpaper $ 32,000
Leasing costs-plant $ 384,000
Materials handling 320,000
Depreciation-equipment 224,000
Coolants & lubricants 22,400
Property taxes-equipment 32,000
Indirect manufacturing labor 275,200
Fire insurance-equipment 16,000
Direct manufacturing labor 2,176,000
Direct material purchases 3,136,000
Direct materials, 1/1/X5 384,000
Direct materials, 12/31/X5 275,200
Finished goods, 1/1/X5 672,000
Sales revenue 12,800,000
Finished goods, 12/31/X5 1,280,000
Sales commissions 640,000
Work-in-process, 1/1/X5 96,000
Sales salaries 576,000
Work-in-process, 12/31/X5 64,000
Advertising costs 480,000
Administration costs 800,000
a. What is the amount of direct materials used during 20X5?
b. What manufacturing costs were added to WIP during 20X5?
c. What amount of prime costs was added to production during 20X5?
d. What amount of conversion costs was added to production during 20X5?
e. What is cost of goods manufactured for 20X5? f. What is cost of goods sold for 20X5?
g. What is gross margin (or gross profit) for 20X5? h. What is operating income for 20X5?
Solutions
Expert Solution
| XYZ Company | ||
| Cost of Goods manuafactured | ||
| Amount | ||
| Direct Material | ||
| Beginning Raw Material Inventory | $ 3,84,000.00 | |
| Add: Purchases | $ 31,36,000.00 | |
| Total raw material available | $ 35,20,000.00 | |
| Less: Ending Raw Material | $ -2,75,200.00 | |
| Raw Material used in Production | $ 32,44,800.00 | |
| Direct Labor | $ 21,76,000.00 | |
| Indirect Manuafcturing Overhead | ||
| Sandpaper | $ 32,000.00 | |
| Material Handling cost | $ 3,20,000.00 | |
| Coolant and Lubricants | $ 22,400.00 | |
| Leasing cost-Plant | $ 3,84,000.00 | |
| Indirect Manufacturing labor | $ 2,75,200.00 | |
| Depreciation-Equipment | $ 2,24,000.00 | |
| Property Taxes-Equipment | $ 32,000.00 | |
| Fire Insurance -Equipment | $ 16,000.00 | $ 13,05,600.00 |
| Total Manufacturing Cost | $ 67,26,400.00 | |
| Add: Work in Process January 1st, | $ 96,000.00 | |
| Total | $ 68,22,400.00 | |
| Less: Work in Process Ending Dec 31st | $ -64,000.00 | |
| Cost of goods manufactured | $ 67,58,400.00 | |
| XYZ Company | ||
| Cost of goods sold | ||
| Amount | ||
| Beginning Finished goods Inventory=(A) | $ 6,72,000.00 | |
| Add: Cost of goods manufactured=(B) | $ 67,58,400.00 | |
| Cost of goods avaialable for sale(C)=(A)+(B) | $ 74,30,400.00 | |
| Less: Ending Finished goods Inventory=(D) | $ 12,80,000.00 | |
| Cost of goods sold (E )=(C)-(D) | $ 61,50,400.00 | |
| XYZ Company | ||
| Income Statement | ||
| Sales Revenue=(A) | $ 1,28,00,000.00 | |
| Less: Cost of goods sold=(B) | $ 61,50,400.00 | |
| Gross Profit=(C )=(A)-(B) | $ 66,49,600.00 | |
| Selling and Administraitve Expenses | ||
| Sales Commission | $ 6,40,000.00 | |
| Sales Salaries | $ 5,76,000.00 | |
| Advertising cost | $ 4,80,000.00 | |
| Administrative cost | $ 8,00,000.00 | |
| Total Selling and Administrative Expense=(D ) | $ 24,96,000.00 | |
| Net Operating Income=(E )-(F) | $ 41,53,600.00 | |
| a) Direct Material used during 20X5= | $ 32,44,800.00 | |
| b) Manufacturing cost added to Work in Process | $ 67,26,400.00 | |
| c) Prime cost includes only Direct Material and Direct Labor cost=($3244800+$2176000) | $ 54,20,800.00 | |
| d) Conversion cost includes Direct Labor and Manufacturing overhead cost=($2176000+$1305600) | $ 34,81,600.00 | |
| e) Cost of goods manufactured | $ 67,58,400.00 | |
| f) Cost of goods sold | $ 61,50,400.00 | |
| g) Gross Margin | $ 66,49,600.00 | |
| h) Net Operating Income | $ 41,53,600.00 |
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