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
<em>Add</em> Opening Work In Progress 22,000
<em>Less</em> 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 (<em>Balancing figure</em>) $90,000
Totals $98,000
