19000 - 2482001 188500 Empire Company Cost of goods Manufactured Schedule For the Month ended October 31, 2020 Work in process Inventory, October 1 Direct Materials used: Beginning Raw materials, October 1 20000 + Add: Raw material purchased 264000 = Total raw materials available for use 284000 Less: Raw material Inventory, October 31 35800 = Direct materials used Direct labor Manufacturing over head: Factory facility rent 63000 + Depreciation on factory equipment 32200 + Indirect labor 29300 + Factory utilities 8925 + Factory insurance 5040 Total manufacturing overhead Total manufacturing costs Total cost of work in process Less: Work in process, October 31 Cost of goods Manufactured 1384651 11 1 575165 594165 14000 580165 11 EMPIRE COMPANY Income Statement $ Empire Company is a manufacturer of smart phones. Its controller resigned in October 2020. An inexperienced assistant accountant has prepared the following income statement for the month of October 2020. $794,700 EMPIRE COMPANY Income Statement For the Month Ended October 31, 2020 Sales revenue Less: Operating expenses Raw materials purchases $264,000 Direct labor cost 188,500 Advertising expense 91,300 Selling and administrative salaries 77,600 Rent on factory facilities 63.000 Depreciation on sales equipment 45.200 Depreciation on factory equipment 32.200 Indirect labor cost 29,300 Utilities expense 11,900 Insurance expense 8,400 Net loss 811.400 $(16,700) Prior to October 2020, the company had been profitable every month. The company's president is concerned about the accuracy of the income statement. As her friend, you have been asked to review the income statement and make necessary corrections. After examining other manufacturing cost data, you have acquired additional information as follows Prior to October 2020, the company had been profitable every month. The company's president is concerned about the accuracy of the income statement. As her friend, you have been asked to review the income statement and make necessary corrections. After examining other manufacturing cost data. you have acquired additional information as follows. 1. Inventory balances at the beginning and end of October were: Raw materials Work in process Finished goods October 1 $20,000 19,000 29,700 October 31 $35,800 14,000 53,400 2. Only 75% of the utilities expense and 60% of the insurance expense apply to factory operations. The remaining amounts should be charged to selling and administrative activities, EMPIRE COMPANY Cost of Goods Manufactured Schedule For the Month Ended October 31, 2020 Work in Process Inventory, October 1 Direct Materials Raw Materials Inventory, October 1 $ 20000 Raw Materials Purchases 264000 284000 Total Raw Materials Available for Use Less Raw Materials Inventory, October 31 Direct Materials Used v 35800 $ 248200 Direct Labor 188500 Manufacturing Overhead Factory Facility Rent 63000 Depreciation on Factory Equipment 32200 Indirect Labor 29300 C. Factory Utilities 8925 Factory Insurance 5040 Indirect Labor 29300 Factory Utilities 8925 5040 138465 Factory Insurance Total Manufacturing Overhead Total Manufacturing Costs Total Cost of Work in Process Less & Work in Process Inventory, October 31 Cost of Goods Manufactured EMPIRE COMPANY Income Statement $ $ >
