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The following calendar-year information is taken from the December 31, 2017, adjusted trial balance and other...

The following calendar-year information is taken from the December 31, 2017, adjusted trial balance and other records of Dahlia Company.

Advertising expense $ 19,125 Direct labor $   650,750
Depreciation expense—Office equipment 8,750 Indirect labor 60,000
Depreciation expense—Selling equipment 10,000 Miscellaneous production costs 8,500
Depreciation expense — Factory equipment 32,500 Office salaries expense 100,875
Factory supervision 122,500 Raw materials purchases 872,500
Factory supplies used 15,750 Rent expense—Office space 21,125
Factory utilities 36,250 Rent expense—Selling space 25,750
Inventories Rent expense—Factory building 79,750
Raw materials, December 31, 2016 177,500 Maintenance expense—Factory equipment 27,875
Raw materials, December 31, 2017 168,125 Sales 3,275,000
Work in process, December 31, 2016 15,875 Sales discounts 57,500
Work in process, December 31, 2017 14,000 Sales salaries expense 286,250
Finished goods, December 31, 2016 164,375
Finished goods, December 31, 2017 129,000

Be sure to show all calculations in detail for full credit.

Required

1. a. Materials used

b. Factory overhead

c. Total manufacturing costs

d. Total cost of work in process

e. Cost of goods manufactured

Required

2.

a. Net sales

b. Cost of goods sold

c. Gross profit

d. Total operating expenses

e. Net income or loss before taxes

Be sure to show all calculations in detail for full credit.

Solutions

Expert Solution

ANS

1) a) MATERIAL USED

BEGINNING RAW MATERIALS = $177500

PURCHASES OF RAW MATERIALS = $872500

CLOSING RAW MATERIALS = $168125

MATERIALS USED = $177500 + $872500 - $168125 = $881875

b) FACTORY OVERHEAD

FACTORY SUPPLIES USED = $15750

FACTORY UTILITIES = $36250

INDIRECT LABOR = $60000

FACTORY SUPERVISION = $122500

DEP EXPENSE- FACTORY EQUIPMENT = $32500

RENT EXPENSE- FACTORY BUILDING = $79750

MISCELLANEOUS PROD COST = $8500

MAINTENANCE EXPENSE- FACTORY EQUIPMENT = $27875

TOTAL FACTORY OVERHEAD = $383125

c) TOTAL MANUFACTURING COSTS

   MATERIALS USED = $881875

DIRECT LABOUR COST = $650750

TOTAL FACTORY OVERHEAD = $383125

TOTAL MANUFACTURING COSTS = $1915750

d) TOTAL COST OF WIP

OPENING WIP - CLOSING WIP = $1875

e) COST OF GOODS MANUFACTURED

   TOTAL MANUFACTURING COSTS = $1915750

OPENING WIP = $15875

CLOSING WIP = $14000

COST OF GOODS MANUFACTURED = $1915750 + $15875 -$14000 = 1917625

2. a) NET SALES

SALES = $3275000

SALES DISCOUNTS = $57500

NET SALES = $3275000 - $57500 = $3217500

b) COST OF GOODS SOLD

OPENING FINISHED GOODS = $164375

COST OF GOODS MANUFACTURED = $1917625

CLOSING FINISHED GOODS = $129000

COGS = $164375 + $1917625 - $129000 = $1953000

c) GROSS PROFIT

NET SALES = $3217500

  COGS = $1953000

GP = $3217500 - $1953000 = $1264500

d) TOTAL OPERATING EXPENSES

GENERAL ADMN EXPENSES :

OFFICE SALARIES EXPENSES = $100875

DEP EXPENSE- OFFICE EQUIPMENT = $8750

RENT EXPENSE- OFFICE SPACE = $21125

TOTAL = $130750

SELLING EXPENSES :

ADVERTISING EXPENSES = $19125

SALES SALARIES EXPENSE = $286250

DEP EXPENSE- SELLING EQUIPMENT = $10000

RENT EXPENSE- SELLING SPACE = $25750

TOTAL = $341125

TOTAL OPERATING EXPENSES = $130750 + $341125 = $471875

e) NET INCOME OR LOSS BEFORE TAXES = GP - OPERATING EXPENSES

= $1264500 - $471875 = $792625

  

ekkarill92 answered 1 year ago
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