Chapter 3 Exercise 5 4. Schedule of cost of goods manufactured, income statement

Question

Chapter 3 Exercise 5

4. Schedule of cost of goods manufactured, income statement

The following information was taken from the ledger of Jefferson Industries, Inc.:

Direct labor $85,000 Administrative expenses $59,000

Selling expenses 34,000 Work in. process:

Sales 300,000 Jan. 1 29,000

Finished goods Dec. 31 21,000

Jan. 1 115,000 Direct material purchases 88,000

Dec. 31 131,000 Depreciation: factory 18,000

Raw (direct) materials on hand Indirect materials used 10,000

Jan. 1 31,000 Indirect labor 24,000

Dec. 31 40,000 Factory taxes 8,000

Factory utilities 11,000

Prepare the following:

a. A schedule of cost of goods manufactured for the year ended December 31.

b. An income statement for the year ended December 31.

Explanation / Answer

Hi,

Please find the answer as follows:

Thanks.

Cost of Goods Manufactured Schedule

Opening Raw Material Inventory 31000
Add Direct material purchases 88000
Raw Material Available for Use 119000
Less Closing Raw Material Inventory -40000
Raw Material Used in Production
79000 Direct Labor
85000 Manufacturing Overhead

Depreciation: factory 18000
Indirect materials used 10000
Indirect labor 24000
Factory taxes 8000
Factory utilities 11000 71000 Total Manufacturing Overhead Cost
235000 Add Opening Work in Process
29000 Less Closing Work in Progress
-21000 Cost of Goods Manufactured
243000

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