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Determine the gross matgin for Pacific States. Manufacturing for the year just e

ID: 2360535 • Letter: D

Question

Determine the gross matgin for Pacific States. Manufacturing for the year just ended( all amounts in thousandth) (000) of dollars Sales $31,800 Purchases of direct materials 7000 Direct labor 5000 work in process inventory, 1/1 800 work in process inventory 12/31 3000 finished goods inventory, 1/1 4000 Accounts payable 1/1 1700 Accounts payable 12/31 1500 Direct materials inventory, 1/1 6000 Direct materials inventory 12/31 1000 indirect labor 600 indirect materials used 500 Utilities expense, factory 1900 Depreciation on factory equipment 3500 what is the Gross margin Cost of goods sold cost of goods manufactured please show work and please list formula's used

Explanation / Answer

olution:

Gross Margin

Pacific States Manufacturing

For year ended 12/31

(all amounts are in thousands ($000)

Sales

$31,800

Less Cost of Goods Sold

  Direct materials inventory 1/1

6,000

  Purchases of direct materials

7,000

  Total raw materials needs

13,000

  Less Direct materials inventory, 12/31

1,000

  Raw materials to be purchased

12,000

  Direct labor

5,000

  Factory Overhead:

    Indirect materials used

500

    Indirect labor

600

   Utilities expense, factory

1,900

   Depreciation on factory equipment

3,500

      Total Manufacturing Overhead

6500

  Total manufacturing cost

23,500

  add Beginning work in process invty 1/1

800

  less Ending work in process invty 12/31

-3,000

  Cost of Goods Manufactured

21,300

  add Beginning finished goods invty 1/1

4,000

  Total goods available for sale

25,300

  Less Ending finished goods invty 12/31

5,300

     Cost of Goods Sold

20,000

Gross Margin

$11,800

olution:

Gross Margin

Pacific States Manufacturing

For year ended 12/31

(all amounts are in thousands ($000)

Sales

$31,800

Less Cost of Goods Sold

  Direct materials inventory 1/1

6,000

  Purchases of direct materials

7,000

  Total raw materials needs

13,000

  Less Direct materials inventory, 12/31

1,000

  Raw materials to be purchased

12,000

  Direct labor

5,000

  Factory Overhead:

    Indirect materials used

500

    Indirect labor

600

   Utilities expense, factory

1,900

   Depreciation on factory equipment

3,500

      Total Manufacturing Overhead

6500

  Total manufacturing cost

23,500

  add Beginning work in process invty 1/1

800

  less Ending work in process invty 12/31

-3,000

  Cost of Goods Manufactured

21,300

  add Beginning finished goods invty 1/1

4,000

  Total goods available for sale

25,300

  Less Ending finished goods invty 12/31

5,300

     Cost of Goods Sold

20,000

Gross Margin

$11,800

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