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:

On Company :

Materials inventory, December $1$ $$87,100$

Materials inventory, December $31($a$)$

Materials purchased $221,230$

Cost of direct materials used in production $233,430$

Direct labor $328,370$

Factory overhead $101,910$

Total manufacturing costs incurred in December $($b$)$

Total manufacturing costs $830,940$

Work in process inventory, December $1167,230$

Work in process inventory, December $31141,100$

Cost of goods manufactured $($c$)$

Finished goods inventory, December $1147,200$

Finished goods inventory, December $31154,170$

Sales $1,283,850$

Cost of goods sold $($d$)$

Gross profit $($e$)$

Operating expenses $167,230$

Net income $($f$)$

Off Company:

Off

Company

Materials inventory, December $1$ $$119,330$

Materials inventory, December $31134,840$

Materials purchased $($a$)$

Cost of direct materials used in production $($b$)$

Direct labor $268,490$

Factory overhead $133,650$

Total manufacturing costs incurred in December $772,070$

Total manufacturing costs $830,940$

Work in process inventory, December $1287,590$

Work in process inventory, December $31($c$)$

Cost of goods manufactured $764,910$

Finished goods inventory, December $1133,650$

Finished goods inventory, December $31($d$)$

Sales $1,193,300$

Cost of goods sold $772,070$

Gross profit $($e$)$

Operating expenses $($f$)$

Net income $264,910$

a$.$ The cost of direct materials used in production includes the beginning materials inventory plus purchases, less the ending materials inventory.

b$.$ Total manufacturing costs incurred during December include direct materials, direct labor, and factory overhead.

c$.$ The cost of goods manufactured is beginning work in process plus total manufacturing costs less the ending work in process.

d$.$ The cost of goods sold is the beginning finished goods plus the cost of goods manufactured, less the ending finished goods.

e$.$ Sales minus cost of goods sold equals gross profit.

f$.$ Gross profit minus operating expenses equals net income.

Use similar relationships from On Company to find the missing amounts for the Off Company items $($a$)$ through $($f$).$

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$2.$ Prepare On Company's statement of cost of goods manufactured for December.

On Company

Statement of Cost of Goods Manufactured

For the Month Ended December $31$

Costs Type Amount Amount Amount

$$-$ Select $-$

Direct materials:

$$-$ Select $-$

$-$ Select $-$

$$-$ Select $-$

$-$ Select $-$

$$-$ Select $-$

$-$ Select $-$

$-$ Select $-$

Total manufacturing costs incurred during December Total manufacturing costs incurred during December

Total manufacturing costs $Total manufacturing costs

$-$ Select $-$

$$-$ Select $-$

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$2.$ The cost of goods manufactured is the beginning work in process plus the cost of direct materials used in production plus direct labor and factory overhead, less the ending work in process.

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$3.$ Prepare On Company's income statement for December.

On Company

Income Statement

For the Month Ended December $31$

Line Item Description Amount Amount

$$-$ Select $-$

Cost of goods sold:

$$-$ Select $-$

$-$ Select $-$

$$-$ Select $-$

$-$ Select $-$

$-$ Select $-$

$$-$ Select $-$

$-$ Select $-$

$$-$ Select $-$

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$3.$ Sales minus cost of goods sold equals gross profit. Cost of goods sold is equal to beginning Finished Goods plus Cost of Goods Manufactured less ending Finished Goods.

Gross profit minus operating expenses equals net income.

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Incorrect