Cost of goods manufactured and income statement Following is information from th

ID: 2418595 • Letter: C

Question

Cost of goods manufactured and income statement

Following is information from the records of the Toronto Company for July 2014.

Purchases

Raw materials - $85,000

Manufacturing supplies – 3,500

Office supplies – 1,200

Sales – 445,800

Admin salaries – 12,000

Direct labor – 117,500

Production employees fringe benefits – 4,000

Sales commissions – 55,000

Production supervisors salaries – 7,200

Plant depreciation – 14,000

Office depreciation – 22,000

Plant maintenance – 10,000

Plant utilities – 35,000

Office utilities – 8,000

Office maintenance – 2,000

Production equipment rent – 6,000

Office equipment rent – 1,300

Inventories July 1 July 31

Raw materials 17,000 26,000

Manufacturing supplies 1,500 3,000

Office supplies 600 1,000

Work-in-progress 51,000 40,000

Finished goods 35,000 27,100

Prepare a statement of cost of goods manufactured and an income statement. Actual overhead costs are assigned to products.

Explanation / Answer

Schedule of Cost of goods manufactured

Raw materials opening $17,000

Add:Purchases 85,000

less:Ending raw material (26,000)

Materials used $76,000

Add:direct labor 117,500

Add:Manufacturing overhead

Supplies (1,500 +3,500 - 3,000) 2,000

Production supervision salries 7,200

Plant Depreciation 14,000

Plant maintenance 10,000

Plant utilities 35,000

Production equipemt rent 6,000 74,200

total incurred 268,000

Add: Opening WIP 51,000

Less: Closing WIP (40,000)

Cost of goods manufactured $279,000

Income statment

Sales $445,800

Less:Cost of goods sold

(35,000+279,000 - 27,100) 286,900

Gross profit 158,900

less:Expenses

Office supplies (600+12,00- 1000) 800

Adminsitratieve salaries 12,000

Sales commission 55,000

Office depreciation 22,000

Office Utilities 8,000

Office maintenance 2,000

Office equipemt rent 1,300 (101,100)

income $57,800