Question

Doggie Delights manufactures its own brand of pet toys. At the end of June, 2019 the accounting records showed the following:

Inventories:	Beginning	Ending
Direct Materials	$14,200	$ 9,600
Work-in-Process	0	3,600
Finished Goods	0	6,800
Other Information:
Direct materials purchases		40,000
Plant janitorial services		4,200
Sales salaries		6,000
Delivery costs		2,900
Sales revenue		206,000
Utilities for plant		10,200
Rent on plant		27,000
Customer service hotline costs		3,000
Direct labor		29,000

(a) Prepare a schedule of cost of goods manufactured for Doggie Delights and

(b) Prepare an income statement for Doggie Delights for the year ended June 30, 2019

Answer 1

	cost of goods manufactured
	Direct materials used
	beginning direct materials				14,200
	Add:direct material purchases				40,000
	Raw materials avaialble for use				54,200
	less:ending direct materials				9,600
	Direct materials used					44,600
	Direct labor					29,000
	Factory overhead
	plant janitorial services				4,200
	utilities for plant				10,200
	Rent on plant				27,000
	total factory overhead					41,400
	total manufacturing costs					115,000
	less :ending work in process					3,600
	cost of goods manufactured					111,400
	income statement
	sales revenue					206,000
	less cost of goods sold
	beginning finished goods				0
	Add cost of goods manufactured				111,400
	cost of goods available for sale				111400
	less:ending finished goods inventory				6,800
	cost of goods sold					104,600
	Gross profit					101,400
	Selling expense
	Sales salaries				6,000
	Delivery costs				2,900
	customer service hotline costs				3,000
	total selling expense					11,900
	Net income					89,500