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		Off Company
Materials inventory, December 1	$86,220		$110,300
Materials inventory, December 31	(a)		124,715
Materials purchased	218,900		(a)
Cost of direct materials used in production	255,120		(b)
Direct labor	325,010		248,270
Factory overhead	100,860		123,610
Total manufacturing costs incurred in December	(b)		713,870
Total manufacturing costs	846,510		979,810
Work in process inventory, December 1	165,520		265,940
Work in process inventory, December 31	139,630		(c)
Cost of goods manufactured	(c)		707,260
Finished goods inventory, December 1	145,690		124,925
Finished goods inventory, December 31	152,570		(d)
Sales	1,270,700		1,103,600
Cost of goods sold	(d)		715,195
Gross profit	(e)		(e)
Operating expenses	165,510		(f)
Net income	(f)		243,865

Required:

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1. Determine the amounts of the missing items, identifying them by letter. Enter all amounts as positive numbers.

Letter	On Company	Off Company
a.
b.
c.
d.
e.
f.

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1. 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.

Note: If an amount should be subtracted, begin entry with a minus (-) sign.

On Company Statement of Cost of Goods Manufactured For the Month Ended December 31

Indirect laborMachinery depreciationSuppliesWork in process inventory, December 1Work in process inventory, December 1			$Work in process inventory, December 1
Direct materials:
Direct laborFactory overheadMaterials inventory, December 1Work in process inventory, December 31Materials inventory, December 1	$Materials inventory, December 1
Factory overheadOperating expensesPurchasesSalesPurchases	Purchases
Cost of direct materials used in productionCost of goods manufacturedCost of goods soldCost of materials available for useCost of materials available for use	$Cost of materials available for use
Indirect laborMaterials inventory, December 31Work in process inventory, December 1Work in process inventory, December 31Materials inventory, December 31	Materials inventory, December 31
Cost of direct materials used in productionCost of goods manufacturedCost of goods soldCost of materials available for useCost of direct materials used in production		$Cost of direct materials used in production
Cost of goods soldDirect laborIndirect laborWork in process inventory, December 1Direct labor		Direct labor
Cost of materials available for useDirect materialsFactory overheadPurchasesFactory overhead		Factory overhead
Total manufacturing costs incurred during December			fill in the blank 26aea7fe1036fa3_17
Total manufacturing costs			$fill in the blank 26aea7fe1036fa3_18
Cost of materials available for useDirect materialsMaterials inventory, December 31Work in process inventory, December 31Work in process inventory, December 31			Work in process inventory, December 31
Cost of direct materials used in productionCost of goods manufacturedCost of goods soldCost of materials available for useCost of goods manufactured			$Cost of goods manufactured

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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.

Note: If an amount should be subtracted, begin entry with a minus (-) sign.

On Company Income Statement For the Month Ended December 31

Cost of goods soldGross profitIndirect laborSalesSales		$Sales
Cost of goods sold:
Finished goods inventory, December 1Finished goods inventory, December 31Operating expensesSalesFinished goods inventory, December 1	$Finished goods inventory, December 1
Cost of direct materials used in productionCost of goods manufacturedCost of goods soldCost of materials available for useCost of goods manufactured	Cost of goods manufactured
Cost of direct materials used in productionCost of finished goods available for saleCost of goods manufacturedCost of materials available for useCost of finished goods available for sale	$Cost of finished goods available for sale
Finished goods inventory, December 1Finished goods inventory, December 31Operating expensesSalesFinished goods inventory, December 31	Finished goods inventory, December 31
Cost of direct materials used in productionCost of goods manufacturedCost of goods soldCost of materials available for useCost of goods sold		Cost of goods sold
Cost of goods soldGross profitOperating expensesSalesGross profit		$Gross profit
Direct laborFactory overheadFinished goods inventory, December 1Operating expensesOperating expenses		Operating expenses
Net incomeNet lossNet income		$Net income

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