CHAPTER 18 Instructions Several items are omitted from the income statement and
ID: 2572381 • Letter: C
Question
CHAPTER 18
Instructions Several items are omitted from the income statement and cost of goods manufactured statement data for two different companies for the month of December 2016 Prius Company $281,96000 2Materials inventory, December 1 3Materials inventory, December 31 4Materials purchased 5 Cost of direct materials used in production Volt Company $177500.00 175,500.00 41,100.00 713,600.00 752,000.00 Direct labor 7 Factory overhead 8 Total manufacturing costs incurred during December 9Total manufacturing costs 10 Work in process inventory, December 1 11 Work in process inventory, December 31 1,060,000.00 179,000.00 1,036,000.00 2,681,600.00 1,479,000.00 443,000.00 327800.00 b) 541,800.00 450,800.00Explanation / Answer
Please note that there is appranetly some error in numbers provided due to which Direct Labour is coming as negative for the month which is not possible. This needs to be checked.
A. Prius Company a) Materials Inventory, Dec 31 Material Purchased $713,600 Add - Material Inventory Dec 1 $281,960 Less - Cost of Material Used in Production $752,000 Materials Inventory, Dec 31 $243,560 b) Total Manufacturing Cost incurred during December Total Manufacturing Cost $2,681,600 Less - Cost of Material used in Production $752,000 Less - Direct Labour $1,060,000 Less - Factory Overheads $327,800 Total Manufacturing Cost Incurred during December $541,800 c) Cost of Goods Manufactured Total Manufacturing Cost $2,681,600 Add - Work in process Inventory Dec 1 $541,800 Less - Work in process Inventory Dec 31 $450,800 Cost of Goods Manufactured $2,772,600 d) Cost of Goods Sold Cost of Goods Manufactured $2,772,600 Less - Finished Goods Inventory, Dec 31 $495,400 Add - Finished Goods Inventory, Dec 1 $479,800 Cost of Goods Sold $2,757,000 e) Gross Profit Sales $4,144,000 Less - Cost of Goods Sold $2,757,000 Gross Profit $1,387,000 f) Net Income Gross Profit $1,387,000 Less - Operating Expenses $543,000 Net Income $844,000