The following data (in thousands of dollars) have been taken from the acounting

Question

The following data (in thousands of dollars) have been taken from the acounting records of Rayburn Corporation for the current year.

Sales $ 1,980

Selling expenses 280

Manufactured overhead 460

Direct Labor 400

Administrative expenses 300

Purchases of raw materials 240

Finished goods inventory, beginning 240

Finished goods inventory, ending 320

Raw materials inventory, beginning 80

Raw materials inventory, ending 140

Work in process inventory, beginning 140

Work in process inventory, ending 100

REQUIRED: (Present all reports in thousands of dollars)

(A.) What was the cost of the raw materials used in production during the year?

(B.) What was the cost of goods manufactured (finished) for the year?

(C.) What was the cost of goods sold for the year?

(D.) What was the net income for the year?

Explanation / Answer

A). COST OF RAW MATERIAL USED IN PRODUCTION = OPENING RAW MATERIAL +PURCHASES - CLOSING RAW MATERIAL = 80+240-140 = $180 THEREFORE COST OF RAW MATERIALS USED IN PRODUCTION = 180 B) COST OF GOODS MANUFACTURED = OPENING WORK IN PROGRESS + RAW MATERIALS USED IN MANUFACTURING - CLOSING WORK IN PROGRESS + DIRECT LABOUR + MANUFACTURING OVERHEAD = 140+180-100+400+460 = $1080. C) COST OF GOODS SOLD = COST OF GOODS MANUFACTURE + OPENING FINISHED GOODS - CLOSING FINISHED GOODS =1080+240-320 =$1000 D) NET INCOME FOR THE YEAR = SALES - COST OF GOODS SOLD - ADMINISTRATIVE EXPENSES - SELLING EXPENSES =1980-1000-300-280 = 400

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