Mesa Designs produces a variety of hardware products, primarily for the do-it-yo
ID: 2329734 • Letter: M
Question
Mesa Designs produces a variety of hardware products, primarily for the do-it-yourself (DIY) market. As part of your job interview as a summer intern at Mesa, the cost accountant provides you with the following (fictitious) data for the year (in $000):
Mesa esigns produces variety of hardware products, primari y for the do-it-yourser DIY marke. As part of your job nte ie as summer iler at Mesa, the cost accountant pro c es you with the Olo ing fictitious data fo the year in $000): Direct materials $ 53 60 T3 Finished gocds 902 1,018 Other information: Administrative costs Depreciation (Factory) Depreciation (Machines) Direct labor Direct materials purchased Indirect labor (Factory) Indirect materials (Factory) Property taxes (Factory) Selling costs Sales revenue Utiiies (Faciory) For the year 00 S 2,600 3,030 4,670 7,000 6,200 1,720 530 210 1,120 32,610 580 Required: Prepare the income statement with a supporing cost of goods sold statement. (Enter your answers in thousands of dolars (Le., 234,000 should be entered as 234)) DES Income Statement For the Year Ended December 31 Less: Cost of goods sold oss margin Administrative costs elling costs Total selling and administrative oosts Operating proft DESIGNS Statement of Cost of Coods Sold For the Year Ended December 31 Manufecturing costs Direct materialsExplanation / Answer
MESA DESIGNS
Income Statement
For the Year ended December 31
($000)
Sales Revenue
$ 32,610.00
Less: Cost of Goods Sold
$ 23,915.00
Gross Margin
$ 8,695.00
Administrative and Selling costs
Administrative Cost
$ 2,600.00
Selling Cost
$ 1,120.00
Total Administrative and Selling costs
$ 3,720.00
Operating Profit
$ 4,975.00
MESA DESIGNS
Cost of Goods Sold
For the Year ended December 31
($000)
Direct Material
Raw material Inventory Beginning
$ 53.00
Raw material Purchased
$ 6,200.00
Raw material available for use
$ 6,253.00
Less: Raw material Inventory Ending
$ 60.00
Direct Material Used
$ 6,193.00
Direct labor
$ 7,000.00
Manufacturing Overheads
Depreciation -Factory
$ 3,030.00
Depreciation-Machines
$ 4,670.00
Indirect Labor (factory)
$ 1,720.00
Indirect Material (factory)
$ 530.00
Property Taxes (Factory)
$ 210.00
Utilities (factory)
$ 580.00
Total Manufacturing Overheads
$ 10,740.00
Total manufacturing Cost
$ 23,933.00
Add: Work in progress Beginning
$ 81.00
Less: Work in progress Ending
$ 73.00
Cost of Goods Manufactured
$ 23,941.00
Add: Beginning Finished Goods Inventory
$ 992.00
Goods Available for sale
$ 24,933.00
Less :Ending Finished goods Inventory
$ 1,018.00
Cost of Goods Sold
$ 23,915.00
MESA DESIGNS
Income Statement
For the Year ended December 31
($000)
Sales Revenue
$ 32,610.00
Less: Cost of Goods Sold
$ 23,915.00
Gross Margin
$ 8,695.00
Administrative and Selling costs
Administrative Cost
$ 2,600.00
Selling Cost
$ 1,120.00
Total Administrative and Selling costs
$ 3,720.00
Operating Profit
$ 4,975.00