The following calendaryear information is taken from the Dec

The following calendar-year information is taken from the December 31, 2017, adjusted trial balance and other records of Dahlia Company.

Be sure to show all calculations in detail for full credit.

Required

1. a. Materials used

b. Factory overhead

c. Total manufacturing costs

d. Total cost of work in process

e. Cost of goods manufactured

Required

2.

a. Net sales

b. Cost of goods sold

c. Gross profit

d. Total operating expenses

e. Net income or loss before taxes

Be sure to show all calculations in detail for full credit.

Advertising expense	$ 19,125	Direct labor	$   650,750
Depreciation expense—Office equipment	8,750	Indirect labor	60,000
Depreciation expense—Selling equipment	10,000	Miscellaneous production costs	8,500
Depreciation expense — Factory equipment	32,500	Office salaries expense	100,875
Factory supervision	122,500	Raw materials purchases	872,500
Factory supplies used	15,750	Rent expense—Office space	21,125
Factory utilities	36,250	Rent expense—Selling space	25,750
Inventories		Rent expense—Factory building	79,750
Raw materials, December 31, 2016	177,500	Maintenance expense—Factory equipment	27,875
Raw materials, December 31, 2017	168,125	Sales	3,275,000
Work in process, December 31, 2016	15,875	Sales discounts	57,500
Work in process, December 31, 2017	14,000	Sales salaries expense	286,250
Finished goods, December 31, 2016	164,375
Finished goods, December 31, 2017	129,000

Solution

ANS

1) a) MATERIAL USED

BEGINNING RAW MATERIALS = $177500

PURCHASES OF RAW MATERIALS = $872500

CLOSING RAW MATERIALS = $168125

MATERIALS USED = $177500 + $872500 - $168125 = $881875

b) FACTORY OVERHEAD

FACTORY SUPPLIES USED = $15750

FACTORY UTILITIES = $36250

INDIRECT LABOR = $60000

FACTORY SUPERVISION = $122500

DEP EXPENSE- FACTORY EQUIPMENT = $32500

RENT EXPENSE- FACTORY BUILDING = $79750

MISCELLANEOUS PROD COST = $8500

MAINTENANCE EXPENSE- FACTORY EQUIPMENT = $27875

TOTAL FACTORY OVERHEAD = $383125

c) TOTAL MANUFACTURING COSTS

   MATERIALS USED = $881875

DIRECT LABOUR COST = $650750

TOTAL FACTORY OVERHEAD = $383125

TOTAL MANUFACTURING COSTS = $1915750

d) TOTAL COST OF WIP

OPENING WIP - CLOSING WIP = $1875

e) COST OF GOODS MANUFACTURED

   TOTAL MANUFACTURING COSTS = $1915750

OPENING WIP = $15875

CLOSING WIP = $14000

COST OF GOODS MANUFACTURED = $1915750 + $15875 -$14000 = 1917625

2. a) NET SALES

SALES = $3275000

SALES DISCOUNTS = $57500

NET SALES = $3275000 - $57500 = $3217500

b) COST OF GOODS SOLD

OPENING FINISHED GOODS = $164375

COST OF GOODS MANUFACTURED = $1917625

CLOSING FINISHED GOODS = $129000

COGS = $164375 + $1917625 - $129000 = $1953000

c) GROSS PROFIT

NET SALES = $3217500

  COGS = $1953000

GP = $3217500 - $1953000 = $1264500

d) TOTAL OPERATING EXPENSES

GENERAL ADMN EXPENSES :

OFFICE SALARIES EXPENSES = $100875

DEP EXPENSE- OFFICE EQUIPMENT = $8750

RENT EXPENSE- OFFICE SPACE = $21125

TOTAL = $130750

SELLING EXPENSES :

ADVERTISING EXPENSES = $19125

SALES SALARIES EXPENSE = $286250

DEP EXPENSE- SELLING EQUIPMENT = $10000

RENT EXPENSE- SELLING SPACE = $25750

TOTAL = $341125

TOTAL OPERATING EXPENSES = $130750 + $341125 = $471875

e) NET INCOME OR LOSS BEFORE TAXES = GP - OPERATING EXPENSES

= $1264500 - $471875 = $792625