Question

johnson Corporation has the following information for the month of March:Purchases $ 105,000Materials inventory, March 1 16,000Materials inventory, March 31 8,000Direct labor 35,000Factory overhead 47,000Work in process, March I 28,000Work in process, March 31 33,500Finished goods inventory, March 1 11,000Finished goods inventory, March 31 30,000Sales 357,000Selling expenses24,000Administrative expenses 29,000Prepare (a) a schedule of cost of goods manufactured, (b) an income statement for the month ended March 31,

Answer 1

Answer-(a):

SCHEDULE OF COST OF GOODS MANUFACTURED For the year ended March 31, 2020
Direct Material used:
Beginning Raw material inventory	$            16,000
Add: cost of raw material purchased	$          105,000
Total raw material available	$          121,000
Less: Ending Raw material inventory	$              8,000
Total raw material used		$          113,000
Direct labour		$            35,000
Factory overhead		$            47,000
Total manufacturing cost		$          195,000
Add: Beginning work-in-process inventory		$            28,000
		$          223,000
Less: Ending work-in-process inventory		$            33,500
Cost of goods manufactured		$          189,500

Answer-(b):

INCOME STATEMENT
For the year ended March 31, 2020
Sales revenue		$357,000
Cost of goods sold:
Beginning finished goods inventory	$11,000
Cost of goods manufactured	189,500
Total finished goods available for sale	200,500
Ending finished goods inventory	30,000
Cost of goods sold		170,500
Gross Profit		186,500
Operating expense:
Selling expense	24000
Administartive expense	29000
Total operating cost		53,000
Net Operating Income		$133,500