Question

. Zoe Corporation has the following information for the month of March: Purchases $ 92,000 Materials inventory, March 1 6,000 Materials inventory, March 31 8,000 Direct labor 25,000 Factory overhead 37,000 Work in process, March 1 22,000 Work in process, March 31 23,500 Finished goods inventory, March 1 21,000 Finished goods inventory, March 31 30,000 Sales 257,000 Sales and administrative expenses 79,000 Prepare (a) a schedule of cost of goods manufactured, (b) an income statement for the month ended March 31, and (c) the inventory section of the balance sheet.

Answer 1

Answer:

1. Cost of goods manufactured = $150,500

2. Net income = $36,500

3. Total Inventory = $61,500

Explanation:

Requirement 1

                   Zoe Corporation

Schedule of cost of goods manufactured

     For the month ended March 31

Direct Materials:

Beginning Materials inventory             $6,000

Add: Raw materials purchases            92,000

Raw materials available for use          $98,000

Less: Ending Raw Materials                    8,000

Direct materials used                          $90,000    

Direct Labor                                           25,000

Prime Cost                                          $115,000

Factory overhead                                   37,000

Total manufacturing cost                 $152,000

Add: Work in process, March 1              22,000

Less: Work in process, March 31          (23,500)

Cost of goods manufactured           $150,500

Requirement 2

                        Zoe Corporation

Income Statement for manufacturing company

            For the month ended March 31

Sales revenue                                                                $257,000

Less: Cost of goods sold

Beginning finished goods inventory           $   21,000

Add: Cost of goods manufactured (Req.1)    150,500

Finished goods available for sale                   171,500

Less: Ending finished goods inventory         (30,000)

Cost of goods sold                                                            141,500

Gross Profit                                                                     $115,500

Less: Sales and administrative expenses                         79,000

Net operating Income                                                    $36,500

Requirement 3

                        Zoe Corporation

                          Balance Sheet

                          As at March 31

Inventory:

Materials                           $8,000

Work-in-process               23,500

Finished goods                 30,000

Total Inventory                $61,500

Inventory consists of all the ending materials, ending work-in-process, and ending finished goods. All the ending items need to be shown in the balance sheet because those inventories will remain at hand at the end of the period.