Question

The following selected account balances are provided for Delray Mfg. Sales Raw materials inventory, beginning Work in process inventory, beginning Finished goods inventory, beginning Raw materials purchases Direct labor Factory supplies used (indirect materials) Indirect labor Repairs-Factory equipment Rent cost of factory building Advertising expense General and administrative expenses Raw materials inventory, ending Work in process inventory, ending Finished goods inventory, ending $ 1,062,000 38,000 54,100 66,100 165,900 231,000 19,800 45,000 5, 250 56,000 81,000 137,000 48,000 40,200 70,400

Answer 1

DELRAY MFG. Schedule of Cost of Goods Manufactured For the Year Ended December 31, Year 1 Direct Materials Raw Material Inventory, Beginning $ 38,000 Add: Raw Materials Purchases $ 165,900 Raw Materials available for use $ 203,900 Less: Raw Material Inventory, Ending $ 48,000 Direct Materials Used Direct Labor Factory Overhead: Factory Supplies used $ 19,800 Indirect Labor $ 45,000 Repairs-Factory Equipment $ 5,250 Rent cost of factory building $ 56,000 Total Factory Overhead Costs Total Manufacturing costs incurred Add: Work in process Inventory, Beginning Total Cost of Work in process Less: Work-in-process Inventory, Ending Cost of goods manufactured DELRAY MFG. Income Statement For the Year Ended December 31, Year 1 Sales $ 1,062,000 Cost of goods sold: Finished goods Inventory, Beginning $ 66,100 Cost of goods Manufactured $ 526,850 Cost of goods available for sale $592,950 Less:Finished goods Inventory, Ending $ 70,400 Cost of goods sold $ 522,550 Gross Profit $ 539,450 Operating Expenses: Advertising Expense $ 81,000 General and administrative Expenses $ 137,000 Total Operating Expenses $ 218,000 Operating Income $ 321,450 $ 155,900 $ 231,000 $ 126,050 $ 512,950 $ 54,100 $567,050 $ 40,200 $ 526,850

Formulas:

DELRAY MFG. Schedule of Cost of Goods Manufactured For the Year Ended December 31, Year 1 Direct Materials Raw Material Inventory, Beginning 38000 Add: Raw Materials Purchases 165900 Raw Materials available for use =D6+D7 Less: Raw Material Inventory, Ending 48000 Direct Materials Used =D8-D9 Direct Labor 231000 Factory Overhead: Factory Supplies used 19800 Indirect Labor 45000 Repairs-Factory Equipment 5250 Rent cost of factory building 56000 Total Factory Overhead Costs =SUM(D13:D16) Total Manufacturing costs incurred =SUM(E5:E17) Add: Work in process Inventory, Beginning 54100 Total Cost of Work in process =E18+E19 Less: Work-in-process Inventory, Ending 40200 Cost of goods manufactured =E20-E21 DELRAY MFG. Income Statement For the Year Ended December 31, Year 1 Sales 1062000 Cost of goods sold: Finished goods Inventory, Beginning 66100 Cost of goods Manufactured =E22 Cost of goods available for sale =H7+H8 Less:Finished goods Inventory, Ending 70400 Cost of goods sold =H9-H10 Gross Profit =15-111 Operating Expenses: Advertising Expense 81000 General and administrative Expenses 137000 Total Operating Expenses I=SUM(H14:H15) Operating Income =112-116

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