A review of Liberty Company’s cost of goods manufactured statement for the fiscal year ended July 31, 19X2, discloses the following information and relationships concerning its single product.

A. Beginning work in process totaling $60,008 represents 52 percent of the ending work in process.

B. Factory overhead was applied to work in process at 40 percent of direct labor dollars.

C. Of the total manufacturing cost, applied factory overhead represents 20 percent.

D. Total costs to account for are $700,008.

Required:

a. Prepare the cost of goods manufactured statement for the year ended July 31, 19X2, in good form. Show supporting computations.

b. To test your understanding of the relationship of one cost component to another, recast the cost of goods manufactured statement using the following information and relationships:

(1) Beginning work in process totaled $60,008 and ending work in process inventory is 52 percent of the beginning work in process inventory.

(2) Direct labor is 40 percent of factory overhead.

(3) Of the total manufacturing cost, applied factory overhead represents 20 percent.

(4) Total costs to account for are $700,008.

c. If your statements in Requirements a and b differ, explain why.