Question

Various cost and sales data for Medco Inc. are given for the just-completed year: Purchases of raw materials Raw materials inventory, beginning Raw materials inventory, ending Depreciation, factory Insurance, factory Direct labour Maintenance, factory Administrative expenses Sales Utilities, factory Supplies, factory Selling expenses Indirect labour Work in process inventory, beginning Work in process inventory, ending Finished goods inventory, beginning Finished goods inventory, ending $ 139,500 12,000 19,500 60,000 5,500 63,500 32,000 74,000 560,000 29,500 1,050 84,500 68,500 7,250 31,000 10,750 43,000

Answer 1

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Medco
Answer 1	Amount $	Amount $	Amount $
Beginning Work in process inventory			7,250.00
Direct materials used
Beginning Raw material inventory	12,000.00
Raw material Purchases	139,500.00
Total Raw material available for use	151,500.00
Less: Ending Raw material inventory	19,500.00
Direct materials used		132,000.00
Direct Labor		63,500.00
Manufacturing Overhead
Depreciation—Factory	60,000.00
Insurance—Factory	5,500.00
Maintenance—Factory	32,000.00
Factory Supplies Used	1,050.00
Factory Utilities	29,500.00
Indirect Labor	68,500.00
Total Manufacturing Overhead		196,550.00
Total Manufacturing costs			392,050.00
Total cost of work in process			399,300.00
Less: Ending Work in process inventory			31,000.00
Cost of goods manufactured			368,300.00

Workings for Answer 2	Amount $
Cost of goods manufactured	368,300.00
Beginning Finished goods inventory	10,750.00
Cost of goods available for sale	379,050.00
Less: Finished goods inventory, ending	43,000.00
Cost of goods sold	336,050.00

Answer 2
Income Statement	Amount $	Amount $
Sales Revenues
Sales Revenues		560,000.00
Less: Cost of goods sold		336,050.00
Gross Profit		223,950.00
Less: Operating costs
Selling Expense	84,500.00
Administrative Expense	74,000.00
Total Operating costs		158,500.00
Net Income		65,450.00
Answer 3	Amount $	Note
Direct materials used	132,000.00	A
Units produced	15,000.00	B
Direct materials cost per unit	8.80	C=A/B
Depreciation—Factory	60,000.00	D
Units produced	15,000.00	See B
Factory Depreciation cost per unit	4.00	E=D/B
Answer 4	Amount $
Units produced- proposed	20,000.00	F
Direct materials cost per unit	8.80	See C
Total Direct materials cost	176,000.00	G=F*C
Units produced- proposed	20,000.00	See F
Depreciation—Factory	60,000.00	See D
Factory Depreciation cost per unit	3.00	H=D/F

Answer 6	Direct materials	Direct Labor	Manufacturing overhead	Total	Note
Cost	132,000.00	63,500.00	196,550.00		I
Units produced	25,000.00	25,000.00	25,000.00		J
Average cost per unit	5.28	2.54	7.86		K=I/J
Ending finished goods inventory	5,000.00	5,000.00	5,000.00		L
Cost of Ending finished goods inventory	26,400.00	12,700.00	39,310.00	78,410.00	M=K*L