Manufacturing Income Statement, Statement of Cost of Goods Manufactured Several
ID: 2424990 • Letter: M
Question
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 2014:
Required:
1. Determine the amounts of the missing items, identifying them by letter. Enter all amounts as positive numbers.
2. Prepare McClellan Company's statement of cost of goods manufactured for December. Enter all amounts as positive numbers.
3. Prepare McClellan Company's income statement for December.
GrantCompany McClellan
Company Materials inventory, December 1 $66,270 $88,800 Materials inventory, December 31 (a) 100,340 Materials purchased 168,330 199,800 Cost of direct materials used in production 177,600 (a) Direct labor 249,840 (b) Factory overhead 77,540 99,460 Total manufacturing costs incurred during December (b) 574,540 Total manufacturing costs 632,220 788,550 Work in process inventory, December 1 127,240 214,010 Work in process inventory, December 31 107,360 (c) Cost of goods manufactured (c) 569,210 Finished goods inventory, December 1 112,000 99,460 Finished goods inventory, December 31 117,300 (d) Sales 976,820 888,000 Cost of goods sold (d) 574,540 Gross profit (e) (e) Operating expenses 127,240 (f) Net income (f) 197,140
Explanation / Answer
MISSING TERMS OF GRANT COMPANY IN COST STATEMENT
1)Materials inventory, December 31 is $ 57,000
(formula: opening stock+purchases-consumption= closing stock)
2)Total manufacturing costs incurred during December is 1,27,240
( formula: prime cost+factory overheads+manufacturing overheads)
3)Cost of goods manufactured is 6,52,100
( formula: prime cost+factory overheads+manufacturing overheads)
4)Cost of goods sold is 6,46,800
(formula: sales-profit= cost of goods sold)
5)Gross profit is 3,30,020
(formula: sales- cost of goods sold=gross profit)
6)Net income 2,02,780
( formula: gross income-operating expenses)
MISSING TERMS OF McClellan Company IN ITS COST STATAMENT
Direct labor $73,710
Gross profit $3,13,460
Operating expenses $1,16,320
COST OF GOODS MANUFACTURED STATEMENT FOR THE G COMPANY MONTH ENDED 2014
DIRECT MATERIAL $1,88,260
DIRECT LABOUR $ 73,710
FACTORY OVERHEAD $ 99,460
MANUFAURING EXPENSES IN DEC MONTH $5,74,540
WORKING IN PROCESS IN DECMBER $4,33,350
TOTAL MANUFACTURING COST $13,69,320
INCOME STATEMENT FOR THE McCLELLAN COMPANY FOR THE MONTH ENDED 2014
SALES $8,88,000
DIRECT MATERIAL $1,88,260
DIRECT LABOUR $ 73,710
FACTORY OVERHEAD $ 99,460
MANUFAURING EXPENSES IN DEC MONTH $5,74,540
WORKING IN PROCESS IN DECMBER $4,33,350
TOTAL MANUFACTURING COST $13,69,320
LESS:TOTAL MANUFACTURING COST - $13,69,460
GROSS PROFIT $4,81,460
LESS: OPERATING EXPENSES -1,16,320
NET INCOME $3,65,140
Cost of direct materials used in production $1,88,260Direct labor $73,710
Work in process inventory, December 31 $4,33,350 Finished goods inventory, December 31 $2,19,330Gross profit $3,13,460
Operating expenses $1,16,320
COST OF GOODS MANUFACTURED STATEMENT FOR THE G COMPANY MONTH ENDED 2014
DIRECT MATERIAL $1,88,260
DIRECT LABOUR $ 73,710
FACTORY OVERHEAD $ 99,460
MANUFAURING EXPENSES IN DEC MONTH $5,74,540
WORKING IN PROCESS IN DECMBER $4,33,350
TOTAL MANUFACTURING COST $13,69,320
INCOME STATEMENT FOR THE McCLELLAN COMPANY FOR THE MONTH ENDED 2014
SALES $8,88,000
DIRECT MATERIAL $1,88,260
DIRECT LABOUR $ 73,710
FACTORY OVERHEAD $ 99,460
MANUFAURING EXPENSES IN DEC MONTH $5,74,540
WORKING IN PROCESS IN DECMBER $4,33,350
TOTAL MANUFACTURING COST $13,69,320
LESS:TOTAL MANUFACTURING COST - $13,69,460
GROSS PROFIT $4,81,460
LESS: OPERATING EXPENSES -1,16,320
NET INCOME $3,65,140
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