The following information is available for All-True Window Company January 1, 20
ID: 2538268 • Letter: T
Question
The following information is available for All-True Window Company
January 1, 2017 2017 December 31, 2017
Raw materials inventory 21,000 30,000
Work in process inventory 13,500 17,200
Finished goods inventory 27,000 21,000
Materials purchased 650,000
Direct labor 300,000
Manufacturing overhead 450,000
Sales revenue 1,625,000
a. Determine the cost of materials used during the year?
b. Prepare Cost of Goods Manufactured statement for the year ended December 31, 2017.
c. Prepare income statement through gross profit for the year ended December 31, 2017.
Explanation / Answer
a Direct materials inventory, January 1 21000 Direct materials purchases 650000 Cost of direct materials available for use 671000 Direct materials inventory, December 31 30000 Cost of direct materials placed in production 641000 b Work in process inventory, January 1 13500 Cost of direct materials placed in production 641000 Direct labor 300000 Manufacturing overhead 450000 Total manufacturing costs 1391000 Total work in process during period 1404500 Work in process inventory, December 31 17200 Cost of goods manufactured 1387300 c Sales revenue 1625000 Cost of goods sold: Finished goods inventory, January 1 27000 Cost of goods manufactured 1387300 Cost of finished goods available for sale 1414300 Finished goods inventory, December 31 21000 Cost of goods sold 1393300 Gross Profit 231700
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