Question

StorSmart Company makes plastic organizing bins. The company has the following inventory balances at the beginning and end of March:

	Beginning Inventory			Ending Inventory
Raw materials	$	29,600		$	26,800
Work in process		22,600			47,000
Finished goods		78,300			69,800

Additional information for the month of March follows:

StorSmart Company makes plastic organizing bins. The company has the following inventory balances at the beginning and end of March:

Raw materials purchases	$	40,600
Indirect materials used		2,000
Direct labor		62,300
Manufacturing overhead applied		35,600
Selling, general, and administrative expenses		24,400
Sales revenue		236,200

Required:
1. Based on the above information, prepare a cost of goods manufactured report.

2. Based on the above information, prepare an income statement for the month of March.

StorSmart Company makes plastic organizing bins. The company has the following inventory balances at the beginning and end of March:

Answer 1

StorSmart Company

Beginning raw materials inventory	$ 29,600
Add: Raw material purchases	$ 40,600
Less: Indirect materials	$ 2000
Less: Ending raw material inventory	$ 26,800
Direct raw material used in production (a)	$ 41,400
Direct labour (b)	$ 62,300
Manufacturing overhead (c)	$ 35,600
Total current manufacturing costs (a+b+c)	$ 139,300
Add: Beginning work in process inventory	$ 22,600
Less:Ending work in process inventory	$ 47,000
Cost of goods manufactured	$ 114,900

The Income Statement is as follows:

Sales Revenue		$ 236,200
Less:Cost of goods sold
Cost of goods manufactured	$ 114,900
Add: Beginning finished inventory	$ 78,300
Less: Ending finished goods inventory	$ 69,800
Cost of Goods Sold		$ 123,400
Gross Profit		$ 112,800
Less: Operating expenses (selling & administ. expenses)		$ 24,400
Net operating income		$ 88,400

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