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 inventory, March 1 22,000 Work in process inventory, 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 statement 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:

Part (a) a statement of cost of goods manufactured

Raw Materials (see calculations)             90,000

Direct labor                                               25,000

Factory overhead                                     37,000

Total Manufacturing Cost                       152,000

Add Opening Work In Progress              22,000

Less Closing Work In Progress               (23,500)

Cost of goods manufactured                  106,500

Part (b) an income statement for the month ended March 31

Sales                                                                                                257,000

Less Cost of Goods Sold

Opening Stock of Finished Goods                     21,000

Add Cost of goods manufactured                    106,500

Less Closing Stock of Finished Goods             (30,000)              (97,500)

Gross Profit                                                                                     159,500

Less Expenses

Sales and administrative expenses                                               (79,000)

Net Income                                                                                       80,500

Part (c) the "Inventory" section of the balance sheet

Raw Materials                              8,000

Work In Progress                      23,500

Finished goods inventory        30,000

Total                                           61,500

Explanation:

Part (a) a statement of cost of goods manufactured

Calculate the Cost of Raw Materials transferred to Manufacturing Process;

Hint: Open a Raw Materials T - Account.

Debits :

Materials inventory March 1                                    $6,000

Purchases                                                               $92,000

Totals                                                                      $98,000

Credits :

Materials inventory, March 31                                   8,000

Manufacturing Account (Balancing figure)         $90,000

Totals                                                                      $98,000