Question

Manufacturing Income Statement, Statement of Cost of Goods Manufactured

Several items are omitted from the income statement and cost of goods manufactured statement data for two different companies for the month of December.

	On Company		Off Company
Materials inventory, December 1	$61,540		$84,310
Materials inventory, December 31	(a)		95,270
Materials purchased	156,310		(a)
Cost of direct materials used in production	164,930		(b)
Direct labor	232,010		189,700
Factory overhead	72,000		94,430
Total manufacturing costs incurred in December	(b)		545,490
Total manufacturing costs	587,100		748,680
Work in process inventory, December 1	118,160		203,190
Work in process inventory, December 31	99,690		(c)
Cost of goods manufactured	(c)		540,430
Finished goods inventory, December 1	104,000		94,430
Finished goods inventory, December 31	108,930		(d)
Sales	907,100		843,100
Cost of goods sold	(d)		545,490
Gross profit	(e)		(e)
Operating expenses	118,160		(f)
Net income	(f)		187,170

Required:

1. Determine the amounts of the missing items, identifying them by letter. Enter all amounts as positive numbers.

Letter	On Company	Off Company
a.	$	$
b.	$	$
c.	$	$
d.	$	$
e.	$	$
f.	$	$

2. Prepare On Company's statement of cost of goods manufactured for December.

On Company
Statement of Cost of Goods Manufactured
For the Month Ended December 31
Work in process inventory, December 1			$
Direct materials:
	$
	$
		$
Total manufacturing costs incurred during December
Total manufacturing costs			$
			$

3. Prepare On Company's income statement for December.

On Company
Income Statement
For the Month Ended December 31
		$
Cost of goods sold:
	$
	$
		$
		$

Answer 1

1)	letter		On		Off
			Company		Company
	a.		52,920		272,320
	b.		468,940		261,360
	c.		487,410		208,250
	d.		482,480		89,370
	e.		424,620		297,610
	f.		306,460		110,440

2)	Cost of goods manufactured (On company)
	Work in process inventory,december 1							118,160
	Raw materials inventory,December 1					61,540
	materials purchased					156,310
	cost of raw materials available for use					217,850
	Raw materials inventory,December 31					52,920
	Cost of direct materials used in production						164,930
	Direct labor						232,010
	Factory overhead						72,000
	Total manufacturing cost incurred in December							468,940
	Total manufacturing cost							587,100
	work in process inventory ,December 31							99,690
	cost of goods manufactured							487,410

sales							907,100
Cost of goods sold
Finished goods inventory,December 1						104,000
cost of goods manufactured						487,410
cost of goods available for sale						591,410
Finished goods inventory,December 31						108,930
Cost of goods sold							482,480
Gross profit							424,620
less operating expense							118,160
net income							306,460

Cost of goods manufactured (Off company)
Work in process inventory,december 1							203,190
Raw materials inventory,December 1					84,310
materials purchased					272,320
cost of raw materials available for use					356,630
Raw materials inventory,December 31					95,270
Cost of direct materials used in production						261,360
Direct labor						189,700
Factory overhead						94,430
Total manufacturing cost incurred in December							545,490
Total manufacturing cost							748,680
work in process inventory ,December 31							208,250
cost of goods manufactured							540,430
Cost of goods sold
Finished goods inventory,December 1						94,430
cost of goods manufactured						540,430
cost of goods available for sale						634,860
Finished goods inventory,December 31						89,370
Cost of goods sold						545,490
income statement
sales						843,100
less cost of goods sold						545,490
Gross profit						297,610
less operating expense						110,440
net income						187,170