The following information is from Marchant Manufacturing Co. for September: Dire
ID: 2425539 • Letter: T
Question
The following information is from Marchant Manufacturing Co. for September:
Direct materials used in production $ 95,000
Direct labor 67,000
Interest expense 4,000
Raw materials inventory, Sept. 1 24,000
Raw materials inventory, Sept. 30 15,000
Work in process inventory, Sept. 1 6,000
Work in process inventory, Sept. 30 26,000
Finished goods inventory, Sept. 1 101,000
Purchases of raw materials 102,000
Factory supervisors 33,000
Administrative expense 41,000
Factory maintenance 35,000
Selling expense 56,000
Sales 400,000
Depreciation machinery 27,000
Utilities for the factory 30,000
Gross Margin 150,000
Required: a. Compute Net Income. ______________
b. Compute the balance in Finished Goods Inventory at September 30. ______________
c. Compute the cost of goods manufactured. ______________
d. Compute total manufacturing overhead. ______________
*Please post solutions - using as a test study guide. Thank you.
Explanation / Answer
Solution.
a. Computetion of Net Income.
Cost of goods sold = Sales 400,000 - Gross Margin 150,000 = $250,000
b. Computetion of the balance in Finished Goods Inventory at September 30.
= 101,000 + 250,000 - 317,000 = $34,000
C. Computetion of the cost of goods manufactured = $95,000 + $101,000 + ($16,000 + 33,000 +35,000+ 27,000 + 30,000 ) + 6,000 - 26,000 = $317,000
d. Computetion of total manufacturing overhead.
Gross Margin 150,000 Interest expense (4,000) Administrative expense (41,000) Selling expense (56,000) Net income 49,000Related Questions
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