Determine the gross matgin for Pacific States. Manufacturing for the year just e
ID: 2360535 • Letter: D
Question
Determine the gross matgin for Pacific States. Manufacturing for the year just ended( all amounts in thousandth) (000) of dollars Sales $31,800 Purchases of direct materials 7000 Direct labor 5000 work in process inventory, 1/1 800 work in process inventory 12/31 3000 finished goods inventory, 1/1 4000 Accounts payable 1/1 1700 Accounts payable 12/31 1500 Direct materials inventory, 1/1 6000 Direct materials inventory 12/31 1000 indirect labor 600 indirect materials used 500 Utilities expense, factory 1900 Depreciation on factory equipment 3500 what is the Gross margin Cost of goods sold cost of goods manufactured please show work and please list formula's usedExplanation / Answer
olution:
Gross Margin
Pacific States Manufacturing
For year ended 12/31
(all amounts are in thousands ($000)
Sales
$31,800
Less Cost of Goods Sold
Direct materials inventory 1/1
6,000
Purchases of direct materials
7,000
Total raw materials needs
13,000
Less Direct materials inventory, 12/31
1,000
Raw materials to be purchased
12,000
Direct labor
5,000
Factory Overhead:
Indirect materials used
500
Indirect labor
600
Utilities expense, factory
1,900
Depreciation on factory equipment
3,500
Total Manufacturing Overhead
6500
Total manufacturing cost
23,500
add Beginning work in process invty 1/1
800
less Ending work in process invty 12/31
-3,000
Cost of Goods Manufactured
21,300
add Beginning finished goods invty 1/1
4,000
Total goods available for sale
25,300
Less Ending finished goods invty 12/31
5,300
Cost of Goods Sold
20,000
Gross Margin
$11,800
olution:
Gross Margin
Pacific States Manufacturing
For year ended 12/31
(all amounts are in thousands ($000)
Sales
$31,800
Less Cost of Goods Sold
Direct materials inventory 1/1
6,000
Purchases of direct materials
7,000
Total raw materials needs
13,000
Less Direct materials inventory, 12/31
1,000
Raw materials to be purchased
12,000
Direct labor
5,000
Factory Overhead:
Indirect materials used
500
Indirect labor
600
Utilities expense, factory
1,900
Depreciation on factory equipment
3,500
Total Manufacturing Overhead
6500
Total manufacturing cost
23,500
add Beginning work in process invty 1/1
800
less Ending work in process invty 12/31
-3,000
Cost of Goods Manufactured
21,300
add Beginning finished goods invty 1/1
4,000
Total goods available for sale
25,300
Less Ending finished goods invty 12/31
5,300
Cost of Goods Sold
20,000
Gross Margin
$11,800
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