Direct materials Direct materials Jan 1 2015 Dec 31 2015 208

Direct materials Direct materials Jan. 1, 2015 Dec. 31, 2015 20,800 22,250 Work in process Work in process Jan. 1,2015 Dec. 31,2015 5,700 4,650 Finished goods Finished goods Jan. 1, 2015 Dec. 31, 2015 102,500 105,250 irect materials purchased Direct manufacturing labor 452,500 335,750 Plant leasing costs Property taxes on plant and equipment lant wide utilities 4,071 960 13,500 500 ,400 Fire insurance on plant and equipment epreciation plant equipment 2,200 52,603 22,126 Amortization - plant leasehold improvements ndirect labor Miscellaneous plant overhead Revenue Marketing, distribution and customer service costs 1,400,000 200,500 140,300 eneral and administration costs Prepare (next page): A Schedule of Cost of Goods Manufactured, in good form, for the year ended December 31, 2015. a. b. An Income Statement, in good form, for the year ended December 31, 2015.

Solution

SCHEDULE OF COST OF GOODS MANUFACTURED Beginning balance of WIP 5700 Direct materials used: Beginning balance of direct materials 20800 Add: Purchases 452500 Total direct materials available 473300 Less: Ending balance of direct materials 22250 Direct materials used 451050 Direct manufacturing labor 335750 Manufacturing overhead: Plant leasing costs 4071 Property taxes o P & E 960 Plant wide utilities 13500 Fire insurance on P&E 500 Depreciation - plant equipment 5400 Amortization - plant leasehold improvements 2200 Indirect labor 42603 Miscellaneous plant overhead 22126 91360 Total manufacturing cost 883860 Less: Ending WIP 4650 Cost of goods manufactured 879210 INCOME STATEMENT Revenue 1400000 Cost of goods sold: Beginning balance of finished goods 102500 Cost of goods manufactured 879210 Cost of goods available for sale 981710 Ending balance of finished goods 105250 Cost of goods sold 876460 Gross profit 523540 Operating expenses: Marketing, distribution & customer service costs 200500 General and administration costs 140300 340800 Net operating income 182740