Question1 The following information was available for The White Corporation for

Question

Question1 The following information was available for The White Corporation for March 2012. The owner, Lemar White, has asked that you use your knowledge from Managerial Accounting iin conjunction with the information below to compile the Income Statement of The White Corporation for the period ended March 31, 2012. Work in Process 3/1/2012 25,000 Work in Process 3/31/2012 101,000 Raw Materials 3/1/2012 Finished Goods 3/1/2012 90,000 Finished Goods 3/31/2012 120,000 Cost of Materials Used Direct Labor Heat, Light, Power- Factory 9,000 Heat, Light, Power-Office 6,000 Depreciation- Factory Depreciation- Office Rent Expense- Factory Rent Expense- Office Property Taxes- Factory Property Taxes- Office Indirect Labor Sales Advertising Expense 50,000 85,000 35.000 10,000 3,000 12.000 1,500 5,000 1,000 20,000 310,000 30,000

Explanation / Answer

INCOME STATEMENT Sales revenue 310,000 Less: Cost of Goods sold Beginning Finished Goods inventory 90000 Cost of goods manufactured: Beginning WIP inventory 125000 Add: Current manufacturing cost Cost of material consumed 85000 Direct labour 35000 Factory OH incurred: Heat light power-Factory 9000 Depreciation-Factory 10000 Rent expense-Factory 12,000 Property taxes-factory 5,000 Indirect labour 20,000 Total current cost of manufacturing 176000 Total cost of goods manufactured 301000 Less: Ending balance of WIP 101,000 Cost of goods manufactured: 200,000 Total cost of Goods available f or sale 290,000 Less: Ending Finished Goods inventory 120,000 Cost of Goods sold 170,000 Gross Margin 140,000 Less: Operating expense Heat light power-Office 6000 Depreciation-Office 3000 Rent expense-Office 1500 Porperty taxes-Office 1000 Advertisement expense 30,000 Net Operating income 98500

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