Question

Incomplete manufacturing costs, expenses, and selling data for two different cases are as follows. (a) Indicate the missing amount for each letter. Case 1 2 Direct materials used $9,760 $ (g) Direct labor 5,680 8,810 Manufacturing overhead 8,480 4,620 Total manufacturing costs (a) 16,570 Beginning work in process inventory 1,460 (h) Ending work in process inventory (b) 3,590 Sales revenue 25,330 (i) Sales discounts 2,790 2,010 Cost of goods manufactured 17,530 22,960 Beginning finished goods inventory (c) 3,660 Goods available for sale 22,290 (j) Cost of goods sold (d) (k) Ending finished goods inventory 3,650 3,250 Gross profit (e) 7,430 Operating expenses 3,290 (l) Net income (f) 5,300 Attempts: 0 of 2 ub) Prepare a condensed cost of goods manaufactures schdule ffor Case1c1) Prepare an Income statement for Case 1c2) Prepare the current assets section of the balance sheet for Case1. Assume that in Case 1 the other items in the current assets section are as follows: Cash $4,000, Receivables (net) $15,000, Raw Materials $600 and Prepaid Expenses $400.

Answer 1

Answer:

                                                    Case 1                2

Total manufacturing costs      23920         16,570

Cost of goods manufactured  17,530        22,960

Cost of goods sold              18640              23370  

Current Assets : Case 1 $ 20,000

Explanation:

Cost of Goods Manufactured Schedule

                                                 Case 1                2

Direct materials used              $9,760           $ (g) 3140

Direct labor                               5,680             8,810

Manufacturing overhead          8,480            4,620

Total manufacturing costs         (a)              16,570

                                                   23920

We add the Direct materials used , Direct labor and  Manufacturing overhead  to get the Total manufacturing costs.

                                                                    Case 1                2

Total manufacturing costs                           23920         16,570

Beginning work in process inventory         1,460              (h)

 ( 19370- 16,570)                                                              2800

Cost of goods available for manufacture   25380         19370

Ending work in process inventory              (b)              3,590

 17,530-25380                                            7850

Cost of goods manufactured                     17,530        22,960

We add the Beginning work in process inventory to the Total manufacturing costs and subtract  Ending work in process inventory to get Cost of Goods Manufactured Schedule. And do reverse operations from starting at the end to get the required amounts.

                                                                    Case 1                2

Cost of goods manufactured                     17,530        22,960

Beginning finished goods inventory           (c)                3,660

(22,290-   17,530 )                                       4760                        

Goods available for sale                           22,290              (j)

 (22,960 + 3,660)                                                             26620

Less Ending finished goods inventory    3,650            3,250

Cost of goods sold                                      (d)                     (k)

                                                                   18640             23370  

We add the Beginning finished goods inventory to the Cost of goods manufactured and subtract  Ending finished goods inventory to get Cost of Goods Sold. And do reverse operations from starting at the end to get the required amounts.

Income statement  

                                                         Case 1               2)

Sales revenue                                25,330            (i)

7,430 +  23370  +  2,010                                  32810

Less Sales discounts                      2,790            2,010

Less Cost of goods sold              18640             23370  

Gross profit                                        (e)                 7,430

25,330 -   2,790- 18640              3900

Operating expenses                      3,290                   (l)

7,430-5,300                                                            2130

Net income                                      (f)                    5,300

3900- 3290                                   610

Sales less Sales discounts less Cost Of Goods Sold gives Gross Profit.

When operating expenses are deducted from the Gross Profit we get Net Income.

Current Assets : Case 1 $ 20,000

Cash                     $4,000,

+Receivables (net) $15,000,

+Raw Materials          $600

+Prepaid Expenses $400.

Total Current Assets  $ 20,000