Following information was taken from the Jamestown Metal Works for the year ende
ID: 2465340 • Letter: F
Question
Following information was taken from the Jamestown Metal Works for the year ended December 31, XXXX:
Sales $10,000,000
Finished goods inventory, Jan 1 $800,000
Finished goods inventory, Dec 31 $700,000
Raw materials inventory, Jan 1 $150,000
Raw materials inventory, Dec 31 $200,000
Raw materials purchases $1,000,000
Direct labor (20,000 hours at $30 @ hour) $600,000
Overhead applied at rate of $20 per DLH
Work in process inventory, Jan 1 $100,000
Work in process inventory, Dec 31 $125,000
Selling, general and administrative expenses $5,000,000
Required:
Prepare cost of goods manufactured schedule.
Prepare income statement with detailed cost of goods sold section.
Explanation / Answer
a Manufacturing cost opening 150000 add:purchases 1000000 Less:closing -200000 950000 direct labor 600000 Total (a) 1550000 Factory Overhead 400000 Add:opening WIP 100000 Les:closing WIP -125000 -25000 Cost of goods manufactured 1925000 b Income Statement Sales 10000000 Less:COGS Cost of goods manufactured 1925000 Add:opening FG 800000 Less:closing FG -700000 2025000 Gross margin 7975000 Less:selling expenses 5000000 Net income 2975000