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Preparing a Schedule of Cost of Finished Goods Manufactured, Cost of Goods Sold Schedule, and an...

Preparing a Schedule of Cost of Finished Goods Manufactured, Cost of Goods Sold Schedule, and an Income Statement. Listed below is information related to Danbury Co’s manufacturing activities for the month of July 2016. Ending Balance Beginning Balance Materials Inventory $7,500 $ 6,000 Goods in Process Inventory 11,000 2,000 Finished Goods Inventory 10,000 9,000 During July 2016, Danbury Company purchased $20,000 of raw materials and incurred direct labor costs of $14,160. The company applies overhead at a rate of 50% of direct labor cost. General, selling and administrative costs amounted to $6,550, and the company sold 10,372 units of its product at a price of $5 each.  

A) Prepare Danbury’s schedule of cost of finished goods manufactured for July 2016.

B) Determine Danbury’s cost of goods sold during July 2016.

C) Prepare Danbury’s income statement for the month ended July 31, 2018 (ignoring interest expense and income taxes)

Solutions

Expert Solution

Beginning Ending Schedule of Finished Goods Manufactured
Material 6000 7500 For the Month of July 2016
WIP 2000 11000 Opening Raw Material 6000
FG 9000 10000 Add: Direct Material Purchase 20000
Total Available Material 26000
Direct Material 20000 Less: Closing Raw Material 7500
Direct Labor 14160 Raw Material Consumed 18500
OH 7080 (14160*50%) Direct Labor 14160
Applied Overhead 7080
Total Current Cost 39740
Opening WIP 2000
Less: Closing WIP 11000
Total Cost of Goods Manufactured 30740
Schedule of Cost of Goods Sold
For the Month of July 2016
Opening Finished Goods 9000
Add: Cost of Goods Manuafctured 30740
Less: Closing Finished Goods 10000
Cost of Goods Sold 29740
Income Statement
For the Month of July 2016
Sales 51860 (10372*5)
Less: Cost of Goods Sold 29740
Gross Contribution 22120
Less: Other Expense
General Admin & Selling 6550
Net Income 15570

ekkarill92 answered 2 years ago
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