Homework SourseThe following selected account balances are provided for Del
The following selected account balances are provided for Delray Mfg. Sales $ 1,234,000 Raw materials inventory, Dec. 31, 2016 37,000 Work in process inventory, Dec. 31, 2016 51,800 Finished goods inventory, Dec. 31, 2016 69,900 Raw materials purchases 180,200 Direct labor 241,000 Factory computer supplies used 16,500 Indirect labor 46,000 Repairs—Factory equipment 5,250 Rent cost of factory building 57,000 Advertising expense 97,000 General and administrative expenses 132,000 Raw materials inventory, Dec. 31, 2017 45,500 Work in process inventory, Dec. 31, 2017 47,000 Finished goods inventory, Dec. 31, 2017 74,400
Solution
STEP - 1 PREPARE SCHEDULE OF COST OF GOODS MANUFATCURE
STEP - 2 PREPARE INCOME STATEMENT
| Direct Materials | ||
| Raw material Inventory 12/31/16 | 37000 | |
| Add: Raw material Puchased | 180200 | |
| Raw material available for use | 217200 | |
| Less: Raw material Inventory 12/31/17 | 45500 | |
| Direct materials used | 171700 | |
| Direct labor | 241000 | |
| Factory overhead | ||
| Factory computer supplies used | 16500 | |
| Indirect labor | 46000 | |
| Repairs - Factory | 5250 | |
| Rent - Factory | 57000 | |
| Total factory overhead costs | 124750 | |
| Total manufacturing costs | 537450 | |
| Add: Work in process Inv 12/31/16 | 51800 | |
| Total cost of work in process | 589250 | |
| Less: work in process inventory 12/31/17 | 47000 | |
| Cost of goods manufactured | 542250 |
