Question

In: Accounting

Keeton Corporation has the following data: Selling and administrative expenses $79,000 Finished goods inventory, December 1...

Keeton Corporation has the following data:

Selling and administrative expenses

$79,000

Finished goods inventory, December 1

21,000

Finished goods inventory, December 31

30,000

Materials inventory, December 1

6,000

Materials inventory, December 31

8,000

Direct labor

25,000

Purchases

92,000

Factory overhead

37,000

Work in process inventory, December 1

22,000

Work in process inventory, December 31

23,500

Sales

257,000

a.   Prepare a schedule of cost of goods manufactured.

b.   Prepare an income statement for the month ended December 31

Solutions

Expert Solution

Keeton Corporation
Schedule of cost of goods manufactured
Direct materials
Materials inventory, December 1 $6,000
Add : Purchases $92,000
Raw materials available for use $98,000
Less: Materials inventory, December 31 ($8,000)
Raw materials used in production $90,000
Direct labor $25,000
Factory overhead $37,000
Total Manufacturing costs $152,000
Add: Work in process inventory, December 1 $22,000
$174,000
Less : Work in process inventory, December 31 ($23,500)
Cost of goods manufactured $150,500
Keeton Corporation
Income Statement
For the month Ended December 31
Sales $257,000
Less: Cost of goods sold
            Finished goods inventory, December 1 $21,000
Add: Cost of goods manufactured $150,500
Less: Finished goods inventory, December 31 ($30,000)
Cost of goods sold ($141,500)
Gross profit $115,500
Less: Selling and administrative expenses ($79,000)
Net profit $36,500

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