Question

Required information The following selected account balances are provided for Delray Mfg. Sales Raw materials inventory, Dec. 31, 2016 Work in process inventory, Dec. 31, 2016 Finished goods inventory, Dec. 31, 2016 Raw materials purchases Direct labor Factory computer supplies used Indirect labor Repairs-Factory equipment Rent cost of factory building Advertising expense General and administrative expenses Raw materials inventory, Dec. 31, 2017 Work in process inventory, Dec. 31, 2017 Finished goods inventory, Dec. 31, 2017 $ 1,444,000 38,000 50,500 63,900 194,000 246,000 22,400 43,000 5,250 52,000 86,000 141,000 47,900 39,800 66,300 Prepare its schedule of cost of goods manufactured for the year ended December 31, 2017

Answer 1

Solution

DELRAY MFG
Cost of Goods manufactured
For the year ended December 31, 2017
Labels	Amount Descriptions	Amount Descriptions
Direct materials
Direct materials inventory, December 31, 2016	$ 38,000
Direct materials purchases	$ 194,000
Cost of direct materials available for use	$ 232,000
Direct materials inventory, December 31, 2017	$ 47,900
Cost of direct materials placed in production		$ 184,100
Direct labor		$ 246,000
Factory overhead
Indirect Labor	$ 43,000
Factory Computer supplies used	$ 22,400
Repairs—Factory equipment	$ 5,250
Rent Expenses-Factory	$ 52,000
Total Factory Overheads		$ 122,650
Total Manufacturing Cost		$ 552,750
Add: Work in process inventory, December 31, 2016		$ 50,500
Total work in process during the period		$ 603,250
Less: Work in process inventory, December 31, 2017		$ 39,800
Costs of good manufactured		$ 563,450

.

DELRAY MFG
Income Statement
For the year ended December 31, 2017
Sales		$ 1,444,000
Cost of Goods Sold
Beginning Finished Goods Inventory	$ 63,900
Cost of goods Manufactured	$ 563,450
Goods Available for sale	$ 627,350
Less: Ending Finished Goods Inventory	$ 66,300
Cost of Goods Sold		$ 561,050
Gross Profit		$ 882,950
Operating Expenses
General and Administrative expenses	$ 141,000
Selling Expenses
Advertisement Expenses	$ 86,000
Total Operating expenses		$ 227,000
Net Income		$ 655,950