Question

[The following information applies to the questions displayed below.]

The following data is provided for Garcon Company and Pepper Company.

	Garcon Company					Pepper Company
Beginning finished goods inventory		$	14,400			$	18,100
Beginning work in process inventory			16,700				21,300
Beginning raw materials inventory (direct materials)			10,400				9,900
Rental cost on factory equipment			33,500				22,450
Direct labor			24,400				40,200
Ending finished goods inventory			18,350				16,400
Ending work in process inventory			24,400				18,400
Ending raw materials inventory			7,200				9,400
Factory utilities			13,200				14,750
Factory supplies used (indirect materials)			12,400				4,000
General and administrative expenses			22,500				47,500
Indirect labor			1,750				9,460
Repairs—Factory equipment			5,300				3,500
Raw materials purchases			42,000				59,000
Selling expenses			60,400				59,200
Sales			207,030				315,010
Cash			21,000				20,200
Factory equipment, net			217,500				169,825
Accounts receivable, net			15,000				20,700

Required:
1. Complete the table to find the cost of goods manufactured for both Garcon Company and Pepper Company for the year ended December 31, 2019.
2. Complete the table to calculate the cost of goods sold for both Garcon Company and Pepper Company for the year ended December 31, 2019.
Required:
3.. Prepare income statements for both Garcon Company and Pepper Company.
4.. Prepare the current assets section of the balance sheet for each company.

Required:
1. Compute the total prime costs for both Garcon Company and Pepper Company.
2. Compute the total conversion costs for both Garcon Company and Pepper Company.

Answer 1

1.

Cost of goods manufactured
		Garcon	Pepper
	Direct Material :-
	Beginning Inventory of Raw material	10400	9900
Add	Material Purchased	42000	59000
	Raw material available for use	52400	68900
Less	Ending inventory of Raw material	7200	9400
	Direct Material Used	45200	78300
	Direct Labor	24400	40200
	Manufacturing Overhead
	Rental cost on factory equipment	33,500	22,450
	factory utilities	13,200	14,750
	factory supplies used	12,400	4,000
	indirect labor	1,750	9,460
	repair factory equipment	5,300	3,500
	total manufacturing overhead	66,150	54,160
	total manufacturing cost	1,35,750	1,72,660
Add	Beginning work in progress	16,700	21,300
	total cost of work in progress	1,52,450	1,93,960
Less	ending work in progress	24,400	18,400
	cost of goods manufactured	1,28,050	1,75,560

2.

Cost of Goods sold
		Garcon	Pepper
	Beginning inventory finished goods	14,400	18,100
Add	Cost of goods manufactured	1,28,050	1,75,560
	Cost of goods available for sale	1,42,450	1,93,660
Less	Ending inventory finished goods	18,350	16,400
	Cost of goods sold	1,24,100	1,77,260

3.

	Income Statement
	Sales revenue	2,07,030	3,15,010
Less	Cost of goods sold	1,24,100	1,77,260
	Gross Profit	82,930	1,37,750
	Operating Expenses
	General and administrative expenses	22,500	47,500
	Selling expenses	60,400	59,200
	Total operating expenses	82,900	1,06,700
	Income before tax	30	31,050

4.

Partial Balance Sheet (Current Assets)
	Garcon	Pepper
Cash	21,000	20,200
Accounts receivables	15000	20700
Inventories
Ending raw material	7,200	9,400
Ending Work in progress	24,400	18,400
Ending Finished Goods	18,350	16,400
Total Current Assets	85,950	85,100

5.

Prime Cost	Garcon	Pepper
Direct Material	10,400	9,900
Direct Labor	24,400	40,200
Total Prime Cost	34,800	50,100

6.

Conversion Cost	Garcon	Pepper
Direct Labor	66150	54,160
manufacturing overhead	24,400	40,200
Total Conversion Cost	90550	94,360

* All amts in Dollars. ($)