Figure 2-15 Information from the records of Chrome Ponies Enterprises for June 2

Question

Figure 2-15

Information from the records of Chrome Ponies Enterprises for June 2014 is as follows:

Sales $41,000

Direct labor 10,000

Selling and administrative expenses 7,000

Direct materials purchases 5,000

Factory overhead 11,500

Inventories

June 1, 2014    June 30, 2014

Direct materials                      $1,200           $1,400

Work in process                      2,500               2,800

Finished goods                        2,300               1,900

A) Refer to Figure 2-15. Chrome Ponies Enterprises' cost of goods manufactured in June is?

B) Refer to Figure 2-15. What is the gross margin (profit)?

C) Refer to Figure 2-15. What is the cost of goods sold?

Explanation / Answer

a) Cost of goods manufactured :

b) Cost of goods sold = 2300+26000-1900 = $26400

c) Gross margin = 41000-26400 = 14600

Beginning direct material 1200 Direct materiall purchase 5000 Less: Ending direct material -1400 Direct material used 4800 Direct labour 10000 Factory overhead 11500 Total manufacturing cost 26300 Beginning work in process 2500 Less: Ending work in process -2800 Cost of goods manufactured 26000

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