Question

The administrative offices and manufacturing plant of Billings Tool & Die share the same building The following information (in $000s) appears in the accounting records for last year Administrative costs Building and machine depreciation (75% of this amount is for factory) Building utilities (90% of this amount is for factory) Direct labor Direct materials inventory, December 31 Direct materials inventory, January 1 Direct materials purchases Factory supervision Finished goods inventory, December 31 Finished goods inventory, January 1 Indirect factory labor Indirect materials and supplies Marketing costs Property taxes on building (85% of this amount is for factory) Sales revenue Work-in process inventory, December 31 Work-in-process inventory, January 1 S 1,652 800 1.270 835 15 12 3,610 494 61 53 920 676 878 800 13,058 25 30 Required Prepare an income statement with a supporting cost of goods sold statement. (Enter your answers in thousands of dollars (i.e., 234,000 should be entered as 234).)

Answer 1

Ans.	BILLINGS TOOLS & DIE
	Income Statement
	For the Year Ended December 31
	Sales Revenue						13,058
	Less: Cost of Goods Sold						8,952
	Gross Margin						$        4,106
	Marketing and Administrative Cost
	Administrative Cost					1,652
	Depreciation					200
	Utilities					127
	Property Taxes					120
	Marketing Cost					878
	Total Marketing and Administrative Cost						2,977
	Operating Profit						$        1,129

BILLINGS TOOLS & DIE
Statement of Cost of Goods sold
For the Year Ended December 31
Particulars				Amt.($)	Amt.($)	Amt.($)
Work In Progress January, 1						$            30
Direct Material Used:
Beginning Raw Material				12
Raw Material Purchased				3,610
Total Raw Material Available for use				3,622
Less: Ending Raw Material Inventory				15
Total material used					$      3,607
Direct Labor					835
Manufacturing Overheads:
Indirect Labor				920
Building Utilities				1,143
Building and Machinery Depreciation				600
Factory Supervision				494
Indirect Material and supplies				676
Property taxes-Factory				680
Total Manufacturing Overheads					$      4,513
Total Manufacturing cost						8,955
Total cost of Work in Progress						8,985
Less: Work In Progress, December 31						25
Cost of Goods manufactured						$      8,960
Beginning Finished Goods, January 1						53
Finished Goods inventory available for sale						9,013
Less: Ending Finished Goods, December 31						61
Cost of Goods Sold						8,952