Question

The following information is available for Bandera Manufacturing Company for the month ending January 31:

Answer 1

Answer:

Bandera Manufacturing Company

a) Cost of goods sold:

Finished goods inventory, January 1    31,700

Cost of goods manufacturing              131,860

Finished goods inventory, January 31 28,900

Cost of goods sold                            $134,660

b) Gross profit

Sales                      $280,560

Cost of goods sold  134,660

Gross profit           $145,900

c) Net Income

Gross profit                   $145,900

Selling expenses              44,050

Administrative expenses 23,290

Net Income                   $78,560

Digital Vibe Manufacturing Company

Digital Vibe Manufacturing Company:

Sales Revenue      $232,300

Cost of goods sold  103,400

Gross profit             128,900

Selling expenses     59,400

Administrative exp.  26,100

Net Income            $43,400                

a. Income Statement for the month ended January 31:

Operating expenses:

Selling expenses                59,400

Administrative exp.             26,100

Total operating expenses 85,500

b. Digital Vibe Manufacturing Company

Inventory Balances For the Month Ended January 31

Inventory balances on January 31:

Raw materials           11,100

Work in process     41,000

Finished goods     26,500

Explanation:

a) Data and Calculations:

Digital Vibe Manufacturing Company

Purchases                   $48,300

less Inventory                  11,100

Cost of materials used 37,200

Direct labor                   55,500

Factory overhead         78,200

Cost of manuf.            170,900

Transferred to

finished goods          129,900

WIP inventory               41,000

Transferred to

finished goods        129,900

Cost of goods sold  103,400

Inventory of finished 26,500

Selling expenses      59,400

Administrative exp.   26,100