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Chapter 16: Q3TI (page 876)

ABC Manufacturing Company has the following data for 2019 (amounts in millions):

Direct Materials, January 1 $ 5

Direct Materials, December 31 7

Work-in-Process Inventory, January 1 12

Work-in-Process Inventory, December 31 16

Finished Goods Inventory, January 1 8

Finished Goods Inventory, December 31 6

Direct Materials Purchased, including Freight In 25

Direct Labor 36

Manufacturing Overhead 17

Prepare the schedule of cost of goods manufactured and the cost of goods sold section of the income statement for the year ended December 31, 2019.

Short Answer

Expert verified

The cost of goods manufactured is $72 and the cost of goods sold is $74.

Step by step solution

01

Preparation of schedule of cost of goods manufactured

02

Preparation of statement of cost of goods sold

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Most popular questions from this chapter

Computing cost of goods sold, merchandising company

Use the following information for The Windshield Helper, a retail merchandiser of auto windshields, to compute the cost of goods sold:

Web Site Maintenance $ 7,900

Delivery Expense 400

Freight In 2,400

Purchases 47,000

Ending Merchandise Inventory 5,500

Revenues 63,000

Marketing Expenses 10,700

Beginning Merchandise Inventory 8,600

Match the definition to the key term.

13. Triple bottom line

14. Value chain

15. Just-in-time management

16. Enterprise resource planning

17. Total quality management

a. A cost management system in which a company produces products just in time to satisfy needs.

b. A philosophy designed to integrate all organizational areas in order to provide customers with superior products and services, while meeting organizational goals throughout the value chain.

c. Software system that can integrate all of a company鈥檚 functions, departments, and data into a single system.

d. Evaluating a company鈥檚 performance by its economic (profits), social (people), and environmental (planet) impact.

e. Includes all activities that add value to a company鈥檚 products and services

This is the first problem in a sequence of problems for Piedmont Computer Company, a manufacturer of personal computers and tablets. During its first month of manufacturing, Piedmont Computer Company incurred the following manufacturing costs:

Balances: Beginning Ending

Direct Materials \( 10,500 \) 9,700

Work-in-Process Inventory 0 17,000

Finished Goods Inventory 0 31,000

Other information:

Direct materials purchases $ 16,000

Plant janitorial services 500

Sales salaries expense 10,000

Delivery expense 1,600

Sales revenue 1,100,000

Utilities for plant 16,000

Rent on plant 9,000

Customer service hotline costs 19,000

Direct labor 210,000

Prepare a schedule of cost of goods manufactured for Piedmont Computer Company for the month ended January 31, 2020.

Computing manufacturing overhead

Sunglasses Unlimited Company manufactures sunglasses. Following is a list of costs the company incurred during May. Use the list to calculate the total manufacturing overhead costs for the month.

Glue for frames $ 250

Depreciation on company cars used by sales force 4,000

Plant depreciation 7,500

Interest Expense 1,500

Lenses 52,000

Company president鈥檚 salary 24,500

Plant foreman鈥檚 salary 3,500

Plant janitor鈥檚 wages 1,300

Oil for manufacturing equipment 150

Computing cost of goods sold and operating income, merchandising company

Consider the following partially completed income statements for merchandising companies and compute the missing amounts:

Smith, Inc. Allen, Inc.

Net Sales Revenue \( 101,000 \) (d )

Cost of Goods Sold:

Beginning Merchandise Inventory (a) 29,000

Purchases and Freight In 50,000 (e)

Cost of Goods Available for Sale (b) 89,000

Ending Merchandise Inventory (2,200) (2,200)

Cost of Goods Sold 61,000 (f)

Gross Profit 40,000 114,000

Selling and Administrative Expenses (c ) 84,000

Operating Income \( 12,000 \) (g)
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