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AURORKA [14]
3 years ago
15

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

r the month December 2016:
On Company Off Company
Materials inventory December 1 65800 195300
Materials inventory December 31 A 91140
Materials purchased 282800 A
Cost of direct materials used in production 317800 B
Direct labor 387800 577220
Factory overhead 148400 256060
Total manufacturing costs incurred in December B 1519000
Total manufacturing costs 973000 1727320
Work in process inventory December 1 119000 208320
Work in process inventory December 31 172200 C
Cost of goods manufactured C 1532020
Finished goods inventory December 1 224000 269080
FInished goods inventory December 31 197400 D
Sales 1127000 1944320
Cost of goods sold D 1545040
Gross profit E E
Operating expenses 117600 F
Net income F 164920

1. Detmine the amount of the missing items, identifying them by letter.
2. Prepare On Company's statement of goods manufactured for December.
3. Prepare On Company's income statement for December.
Business
1 answer:
Delicious77 [7]3 years ago
5 0

Answer:

1. ON Company

a. $30,800

b. $854,000

c. $800,800

d. $827,400

e. $299,600

f. $182,000

Off Company

     a. $581,560

     b. $685,720

     c. $195,300

    d. $256,060

    e. $399,280

    f. $234,360

2.1                       On Company  

Statement of Cost of Goods Manufactured  

For the month Ended December 31, 2016  

 

Raw Material  

Raw material, beginning    $65,800

<u> Add:Purchases                    282,800</u>

Raw materials available    348,600

<u>Less: Raw material, end      30,800</u>

Cost of raw material used    317,800

<u>Add: Direct labor                   387,800</u>

Prime Cost                           705,600

<u>Add: Factory overhead    148,400</u>

Manufacturing cost           854,000

Add: Work in process, beginning  119,000

<u>Less: Work in process, Ending     172,200 </u>

Cost of Goods Manufactured   $800,800

2.2                     Off Company  

Statement of Cost of Goods Manufactured  

For the month Ended December 31, 2016  

 

Raw Material  

Raw material, beginning    $195,300

<u>Add:Purchases                      581,560</u>

Raw materials available    776,860

<u>Less: Raw material, end        91,140</u>

Cost of raw material used    685,720

<u>Add: Direct labor                    577,220 </u>

Prime Cost                         1,262,940

<u>Add: Factory overhead         256,060 </u>

Manufacturing cost         1,519,000

Add: Work in process, beginning 208,320

<u> Less: Work in process, Ending    195,300 </u>

Cost of Goods Manufactured   $1,532,020

3.1                     On Company  

                Income Statement  

For the month Ended December 31, 2016  

 

Sales                                 $1,127,000

<u>Less: Cost of goods sold    827,400</u>

Gross profit                            299,600

<u>Less: Operating expenses            117,600</u>

Net Income                          $182,000

3.2                       Off Company  

                       Income Statement  

For the month Ended December 31, 2016  

 

Sales                                  $1,944,320

<u>Less: Cost of goods sold    1,545,040 </u>

Gross profit                              399,280

<u>Less: Operating expenses     234,360 </u>

Net Income                               164,920

Explanation:

a1. To get the raw materials end balance, we have to add the raw materials beginning plus the purchases then deduct it from raw materials used in the given data.

a & b (Off Company). To compute the Raw materials used and purchases, we will begin with the given manufacturing cost amount, then deduct from it the factory overhead and direct labor to get the cost of materials used for the period. Then from it we add the raw material ending balance and add back the raw materials beginning to get the purchases for the month.

b. (On Company) Manufacturing cost is computed by adding cost of materials used and direct labor and factory overhead.

c. (On Company) To get the cost of goods sold, we add work in process beginning balance to the manufacturing cost we computed earlier and then deduct work in process ending balance.

c. (Off Company) to get the work in process end, we begin with the manufacturing cost and add work in process beginning then less the cost of goods manufactured.

d. (On Company) To get the cost of goods sold, we add cost of goods manufactured and finished goods beginning then deduct finished goods end.

d. (Off Company) To compute the finished goods end, we add cost of goods manufacture and finished goods beginning balance then deduct cost of goods sold from it.

e. (On Company) Gross profit is computed by deducting cost of goods sold $827,400 from the sales of $1,127,000

e. (Off Company) Gross profit is computed by deducting cost of goods sold $1,545,040 from the sales of $1,944,320

f. (On Company) Net income is computed by deducting Operating expense of $117,600 from Gross Profit $299,600

f. (Off Company) To compute operating expense we deduct Net income amount o0f $164,920 from the gross profit of $399,280

                        On Company  

Statement of Cost of Goods Manufactured  

For the month Ended December 31, 2016  

 

Raw Material  

Raw material, beginning    $65,800

<u> Add:Purchases                    282,800</u>

Raw materials available    348,600

<u>Less: Raw material, end      30,800</u>

Cost of raw material used    317,800

<u>Add: Direct labor                   387,800</u>

Prime Cost                           705,600

<u>Add: Factory overhead    148,400</u>

Manufacturing cost           854,000

Add: Work in process, beginning  119,000

<u>Less: Work in process, Ending     172,200 </u>

Cost of Goods Manufactured   $800,800

Statement of Cost of Goods Sold  

 

Finished goods, beginning          $224,000

<u>Add: Cost of Goods Manufactured    800,800</u>

Cost of goods available for sale         1,024,800

<u>Less: Finished goods, ending              197,400</u>

Cost of goods sold                          $827,400

2.2                     Off Company  

Statement of Cost of Goods Manufactured  

For the month Ended December 31, 2016  

 

Raw Material  

Raw material, beginning    $195,300

<u>Add:Purchases                      581,560</u>

Raw materials available    776,860

<u>Less: Raw material, end        91,140</u>

Cost of raw material used    685,720

<u>Add: Direct labor                    577,220 </u>

Prime Cost                         1,262,940

<u>Add: Factory overhead         256,060 </u>

Manufacturing cost         1,519,000

Add: Work in process, beginning 208,320

<u> Less: Work in process, Ending    195,300 </u>

Cost of Goods Manufactured   $1,532,020

Statement of Cost of Goods Sold  

 

Finished goods, beginning            $269,080

<u> Add: Cost of Goods Manufactured    1,532,020 </u>

Cost of goods available for sale     1,801,100

<u> Less: Finished goods, ending             256,060 </u>

Cost of goods sold                          $1,545,040

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