Question

The following information is available for Robstown Corporation for 20Y8:

Answer 1

Answer:

A. Statement of cost of goods manufactured for the year ended 20Y8

Beginning Work In Process                                                               $63,900

Add Manufacturing Costs :

Materials ($44,250 + $556,600 - $31,700)          $569,150

Depreciation expense-factory equipment            $80,000

Direct labor                                                          $1,100,000

Heat, light, and power-factory                               $53,300

Indirect labor                                                          $115,000

Property taxes-factory                                           $40,000

Rent expense-factory                                             $27,000

Supplies-factory                                                       $9,500

Miscellaneous costs-factory                                    $11,400      

                                                                                                       $2,005,300

Less Ending Work In Process                                                          ($80,000)

Cost of Goods Manufactured                                                        $1,989,250

B. Income statement for the year ended 20Y8

Sales                                                                                             $3,850,000

Less Cost of Goods Sold

Opening Finished Goods                                     $101,200

Add Cost of Goods Manufactured                   $1,989,250

Less Ending Finished Goods                              ($99,800)      ($1,990,650)

Gross Profit                                                                                   $1,859,350

Less Operating Expenses

Advertising expense                                          $400,000

Depreciation expense-office equipment            $30,000

Office salaries expense                                      $318,000

Property taxes-office building                             $25,000

Sales salaries expense                                      $200,000        ($973,000)

Net Income                                                                                   $886,350

Explanation:

Part A

Statement of cost of goods manufactured is a summary of the cost incurred in the manufacturing process.

Cost of Goods Manufactured = Opening Work In Process + Total Manufacturing Costs - Closing Work In Process

Part B

Income Statement shows the profit earned during the reporting period

Profit = Gross Profit (Sales - Cost of Goods Sold) - Operating Expenses