Question
During the year of 2019, XYZ Company had the following financial information: Work in process (beginning) $1,080 Work in process (ending) 950 Finished Goods (beginning)
During the year of 2019, XYZ Company had the following financial information:
Work in process (beginning) $1,080
Work in process (ending) 950
Finished Goods (beginning) 0
Finished Goods (ending) 100
Sales 2,000
Raw Materials used 500
Labour (note 1) 200
Production facility Rent 400
Utilities (note 2) 100
Advertising 200
Note 1: 75% of Labour costs are Direct Labour and the remaining costs are indirect manufacturing
Labour Note 2: 80% of Utilities are product costs
Note 3: At the end of the year, the Overhead account had a $40 credit balance
Note 4: The company applies all under/over allocated overhead to COGS
Note 5: Overhead is allocated on the basis of direct labour costs
Required: a. Prepare a Statement of Cost of Goods Manufactured
b. Prepare an Income Statement that includes Cost of Goods Sold
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started