Manufacturing Income Statement, Statement of Cost of Goods Manufactured<\/p>\n\n\n\n
Several items are omitted from the income statement and cost of goods manufactured statement data for two different companies for the month of December.<\/p>\n\n\n\n
On
Company Off
Company
Materials inventory, December 1 $69,420 $93,020
Materials inventory, December 31 (a) 105,110
Materials purchased 176,330 (a)
Cost of direct materials used in production 186,050 (b)
Direct labor 261,710 209,300
Factory overhead 81,220 104,180
Total manufacturing costs incurred in December (b) 601,840
Total manufacturing costs 662,270 826,020
Work in process inventory, December 1 133,290 224,180
Work in process inventory, December 31 112,460 (c)
Cost of goods manufactured (c) 596,260
Finished goods inventory, December 1 117,320 104,180
Finished goods inventory, December 31 122,870 (d)
Sales 1,023,250 930,200
Cost of goods sold (d) 601,840
Gross profit (e) (e)
Operating expenses 133,290 (f)
Net income (f) 206,500
Required:<\/p>\n\n\n\n
The Correct Answer and Explanation is :<\/strong><\/mark><\/p>\n\n\n\n To solve for the missing data in the manufacturing income statement and statement of cost of goods manufactured, we can use the known formulas for both. Let\u2019s start by identifying the relationships between the variables in the income statement and cost of goods manufactured statement.<\/p>\n\n\n\n We are given the following relationships:<\/p>\n\n\n\n The formula for the Cost of Direct Materials Used<\/strong> is: From the data, we know: The formula for Cost of Goods Manufactured<\/strong> is: We are given: The formula for Cost of Goods Sold<\/strong> is: We know: Gross Profit is calculated as: We know: Operating Expenses are given as $133,290<\/strong>. Net Income is: Thus, the Net Income<\/strong> is $288,120<\/strong>.<\/p>\n\n\n\n These calculations follow standard accounting formulas for manufacturing income statements, where we account for materials used, direct labor, overhead, inventories, and sales. Each calculation relies on basic principles of cost of goods sold, manufacturing costs, and inventory adjustments to determine the missing values.<\/p>\n","protected":false},"excerpt":{"rendered":" Manufacturing Income Statement, Statement of Cost of Goods Manufactured Several items are omitted from the income statement and cost of goods manufactured statement data for two different companies for the month of December. OnCompany OffCompanyMaterials inventory, December 1 $69,420 $93,020Materials inventory, December 31 (a) 105,110Materials purchased 176,330 (a)Cost of direct materials used in production 186,050 […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[25],"tags":[],"class_list":["post-193071","post","type-post","status-publish","format-standard","hentry","category-exams-certification"],"_links":{"self":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/193071","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/comments?post=193071"}],"version-history":[{"count":0,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/193071\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/media?parent=193071"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/categories?post=193071"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/tags?post=193071"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Company Off<\/h3>\n\n\n\n
1. Materials Inventory<\/strong><\/h4>\n\n\n\n
\n
[ \\text{Cost of Direct Materials Used} = \\text{Beginning Materials Inventory} + \\text{Materials Purchased} – \\text{Ending Materials Inventory} ]<\/p>\n\n\n\n
[ 186,050 = 93,020 + a – 105,110 ]
Solving for (a):
[ a = 186,050 – 93,020 + 105,110 ]
[ a = 198,140 ]
So, the Materials Purchased<\/strong> is $198,140<\/strong>.<\/p>\n\n\n\n2. Cost of Goods Manufactured<\/strong><\/h4>\n\n\n\n
[ \\text{Cost of Goods Manufactured} = \\text{Total Manufacturing Costs} + \\text{Work in Process Inventory (Beginning)} – \\text{Work in Process Inventory (Ending)} ]<\/p>\n\n\n\n
[ 596,260 = 826,020 + 224,180 – c ]
Solving for (c):
[ c = 826,020 + 224,180 – 596,260 ]
[ c = 454,940 ]
So, the Ending Work in Process Inventory<\/strong> is $454,940<\/strong>.<\/p>\n\n\n\n3. Finished Goods Inventory<\/strong><\/h4>\n\n\n\n
[ \\text{Cost of Goods Sold} = \\text{Cost of Goods Manufactured} + \\text{Finished Goods Inventory (Beginning)} – \\text{Finished Goods Inventory (Ending)} ]<\/p>\n\n\n\n
[ 601,840 = 596,260 + 104,180 – d ]
Solving for (d):
[ d = 596,260 + 104,180 – 601,840 ]
[ d = 98,600 ]
So, the Ending Finished Goods Inventory<\/strong> is $98,600<\/strong>.<\/p>\n\n\n\n4. Gross Profit<\/strong><\/h4>\n\n\n\n
[ \\text{Gross Profit} = \\text{Sales} – \\text{Cost of Goods Sold} ]<\/p>\n\n\n\n
[ e = 1,023,250 – 601,840 ]
[ e = 421,410 ]
So, the Gross Profit<\/strong> is $421,410<\/strong>.<\/p>\n\n\n\n5. Operating Expenses and Net Income<\/strong><\/h4>\n\n\n\n
[ f = 421,410 – 133,290 ]
[ f = 288,120 ]<\/p>\n\n\n\nSummary of the Answers:<\/h3>\n\n\n\n
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