1. Cost of goods manufactured, $1,262,816 PR 18-5A Statement of cost of goods ma
ID: 2500463 • Letter: 1
Question
1. Cost of goods manufactured, $1,262,816
PR 18-5A Statement of cost of goods manufactured and income statement for a manufacturing company
OBJ. 2, 3
The following information is available for The Lucille Corporation for 2014:
Inventories
January 1
December 31
Materials
$292,500
$364,000
Work in process
526,500
494,000
Finished goods
507,000
480,000
Advertising expense
$ 247,000
Depreciation expense—office equipment
35,100
Depreciation expense—factory equipment
46,800
Direct labor
559,000
Heat, light, and power—factory
18,720
Indirect labor
65,620
Materials purchased
549,900
Office salaries expense
191,750
Property taxes—factory
15,210
Property taxes—office building
31,590
Rent expense—factory
25,740
Sales
2,574,000
Sales salaries expense
315,900
Supplies—factory
12,870
Miscellaneous costs—factory
7,956
Instructions
1. Prepare the 2014 statement of cost of goods manufactured.
2. Prepare the 2014 income statement.
Inventories
January 1
December 31
Materials
$292,500
$364,000
Work in process
526,500
494,000
Finished goods
507,000
480,000
Advertising expense
$ 247,000
Depreciation expense—office equipment
35,100
Depreciation expense—factory equipment
46,800
Direct labor
559,000
Heat, light, and power—factory
18,720
Indirect labor
65,620
Materials purchased
549,900
Office salaries expense
191,750
Property taxes—factory
15,210
Property taxes—office building
31,590
Rent expense—factory
25,740
Sales
2,574,000
Sales salaries expense
315,900
Supplies—factory
12,870
Miscellaneous costs—factory
7,956
Explanation / Answer
Statement of cost of goods manufactured Particulars Amount Amount Opening stock of Raw Meterial 2,92,500 Add: Purchases During the year 5,49,900 Less: Closing Stock of raw meterial -3,64,000 Raw Meterail Consumed 4,78,400 Direct Labour 5,59,000 Prime Cost 10,37,400 Factory Overhead Depreciation Expenses - Factory Equipment 46,800 Heat, Light and Power 18,720 Property Taxes - Factory 15,210 Rent Expenses - Factory 25,740 Supplies - Factory 12,870 Misc. Costs - Factory 7,956 Total Factory Over Head 1,27,296 Works Cost Incurred 11,64,696 Add: Opening Stock of Work in Progress 5,26,500 Less: Closing Stock of Work in progress -4,94,000 32,500 Works Cost 11,97,196 Administrative Overhead Depreciation Expenses - Office Equipment 35,100 Indirect Labour 65,620 Office Salaries Expenses 1,91,750 Property Taxes - Office Building 31,590 Total Administrative Overhead 3,24,060 Cost of Production 15,21,256 Income Statement Sales 25,74,000 Less : Cost of Goods Sold Cost of Production 15,21,256 Add: Opening Stock of Finished Goods 5,07,000 Less: Closing Stock of Finished Goods -4,80,000 Cost of Goods Sold -15,48,256 Less: Selling and Distribution Overhead Advertisment Expenses 2,47,000 Sales Salaries Expenses 3,15,900 Selling and Distribution Over head -5,62,900 Profit 4,62,844
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