The following events took place for Digital Vibe Manufacturing Company during Ma

Question

The following events took place for Digital Vibe Manufacturing Company during March, the first month of its operations as a producer of digital video monitors:

b. Determine the inventory balances at the end of the first month of operations.

Digital Vibe Manufacturing Company

Income Statement

For the Month Ended March 31

1

2

3

4

.Operating expenses:

5

6

7.

Total operating expenses

8

b. Using the information given, determine the inventory balances at the end of the first month of operations.

a. Purchased $137,800 of materials. b. Used $94,100 of direct materials in production. c. Incurred $184,800 of direct labor wages. d. Incurred $212,720 of factory overhead. e. Transferred $423,160 of work in process to finished goods. f. Sold goods for $645,000. g. Sold goods with a cost of $365,000. h. Incurred $86,260 of selling expense. i. Incurred $71,950 of administrative expense.

Explanation / Answer

a) Income statement :

b)  Using the information given, determine the inventory balances at the end of the first month of operations.

Sales 645000 Less: Cost of goods sold 365000 Gross profit 280000 Operating expense Selling expense 86260 Administrative expense 71950 Total operating expense 158210 Net operating income 121790

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