Hi every body i have these balances for a company x Raw materials $40,000 Work i

Question

Hi every body i have these balances for a company x

Raw materials $40,000

Work in process $30,000

Finished goods $60,000

for the current year the company estimated that it would work 150.000 machine hours and incu $900,000 in manufacturing overhead costs. the following occurred during the year

1- purchased raw materials $820,000

2- Raw materials requisitioned for production, $720,000 direct and $40,000 indirect.

3-factory labor costs recorded, $150,000 direct and $220,000 indirect labor.

4- other manufacturing overhead costs incurred , $660,000

5- overhead was applied to production due to greater than expected demand the company worked 160,000 machine hours during the year

6- goods costing $1,800,000 were completed

7- Goods costing $1,740,000 to manufacture were sold on account for $3,000,000

required

1- cost of goods manufactured statement.

2- assume the company incurred selling and administrative costs of $1,120,000 prepare an income statement for the company.

Im dying to fiqure out the answer.

Explanation / Answer

OPENING STOCK OF RAW MATERIALS = 40000

ADD:-PURCHASES [DIRECT MATERIAL] = 820000

LESS:CLOSING STOCK OF RAW MATERIALS[b/f] = (140000)

RAW MATERIALS CONSUMED = 720000

DIRECT LABOR = 150000

PRIME COST = 870000

INDIRECT LABOR = 220000

INDIRECT MATERIALS = 40000

OTHER MANUFACTURING OVERHEAD = 660000

ADD:OPENING WIP = 30000

LESS:CLOSING WIP [ BALANCING FIGURE] =(20000)

COST OF GOODS MANUFACTURED = 1800000

INCOME STATEMENT

OPENING STOCK

Raw materials $40,000

Work in process $30,000

Finished goods $60,000

ADD:-PURCHASES = 820000

LESS:-CLOSING STOCK

RAW MATERIALS =(140000)

WIP=(20000)

FINISHED GOODS [1800000-1740000] = (60000)

GROSS PROFIT = 730000

LESS:-DIRECT LABOR = (150000)

INDIRECT LABOR = (220000)

MANUFACTURING OVERHEAD APPLIED [900000/150000 * 160000] = (960000)

NET LOSS = (600000)

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