At May 31, 2012, the accounts of Hannifan Manufacturing Company show the followi
ID: 2345036 • Letter: A
Question
At May 31, 2012, the accounts of Hannifan Manufacturing Company show the following.1. May 1 inventories-finished goods $12,600, work in process $14,700, and raw materials $8,200.
2. May 31 inventories-finished goods $9,500, work in process $17,900, and raw materials $7,100.
3.Debit postings to work in process were: direct materials $62,400, direct labor $32,000, and manufacturing overhead applied $40,000.
4. Sales totaled $200,000.
Complete the condensed cost of goods manufactured schedule.
Complete the income statement for May through gross profit.
Indicate the balance sheet presentation of the manufacturing inventories at May 31, 2012.
Explanation / Answer
a)
Work in process, May 1................................. ...$14,700
Direct materials used............................ $62,400
Direct labor........................................$32,000
Manufacturing overhead applied............... $40,000
Total manufacturing costs..............................$134,400
Total cost of work in process...............................$149,100
Less: Work in process, May 31............................$17,900
Cost of goods manufactured............................... $131,200
b)
Sales........................................................... $200,000
Cost of goods sold
Finished goods, May 1.......................$12,600
Cost of goods manufactured...............$131,200
Cost of goods available for sale............$143,800
Finished goods, May 31......................$9,500
Cost of goods sold......................................$134,300
Gross profit......................................................$65,700
c) In the May 31 balance sheet, the manufacturing inventories will be reported in current assets as follows:Finished goods $9,500, Work in Process $17,900, and Raw Materials $7,100.
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