Question

The Howell Corporation has the following account balances (in millions): (Click the icon to view the account balances.) Requirement Prepare an income statement and a supporting schedule of cost of goods manufactured for the year ended December 31, 2017 Begin by preparing the schedule of cost of goods manufactured (in millions). Start with the direct materials and labor costs, then indirect manufacturing costs, and finally complete the schedule by calculating the cost of goods manufactured. Howell Corporation Schedule of Cost of Goods Manufactured For the Year Ended December 31, 2017 (in millions) Direct materials costs: Beginning inventory, Jan. 1, 2017 Purchases of direct materials Cost of direct materials available for use Ending inventory, Dec. 31, 2017 Direct materials used Direct manufacturing labor costs 325 100

(my answers were wrong) please help

Answer 1

Solution:

Schedule of cost of goods manufactured (In Millions)
Direct Material:
Direct Material, Jan 1, 2017	$15
Add: Purchase of direct Material	$325
Total Direct material available for use	$340
Less: Direct Material, Dec 31, 2017	$20
Direct Materials used in production		$320
Direct manufacturing Labor		$100
Indirect Manufacturing costs:
Depreciation—plant, and equipment	$80
Plant Supervisory salaries	$5
Miscellaneous Plant overhead	$35
Plant Supplies used	$10
Plant Utilities	$30
Indirect manufacturing Labor	$60
Total Indirect Manufacturing costs		$220
Total Manufacturing Costs		$640
Add: Work in Process, Jan 1, 2017		$10
Subtotal		$650
Less: Work in Process, Dec 31, 2017		$5
Cost of goods manufactured		$645

Income Statement (in Millions)
Sales revenue		$950
Cost of Goods sold:
Cost of goods manufactured	$645
Add: Finished goods, Jan 1, 2017	$70
Total Cost of goods available for sale	$715
Less: Finished Goods, Dec 31, 2017	$55
Cost of goods sold		$660
Gross Profit		$290
Less: Marketing, distribution, and customer-service costs		$240
Net Income		$50