The administrative offices and manufacturing plant of Billin

The administrative offices and manufacturing plant of Billings Tool & Die share the same building. The following information (in $000s) appears in the accounting records for last year:
  

Required:

Prepare an income statement with a supporting cost of goods sold statement. (Enter your answers in thousands of dollars (i.e., 234,000 should be entered as 234).)

Administrative costs	$	1,658
Building and machine depreciation (75% of this amount is for factory)		900
Building utilities (90% of this amount is for factory)		1,310
Direct labor		845
Direct materials inventory, December 31		14
Direct materials inventory, January 1		10
Direct materials purchases		3,630
Factory supervision		481
Finished goods inventory, December 31		69
Finished goods inventory, January 1		55
Indirect factory labor		915
Indirect materials and supplies		679
Marketing costs		879
Property taxes on building (85% of this amount is for factory)		800
Sales revenue		12,916
Work-in-process inventory, December 31		25
Work-in-process inventory, January 1		32

Solution

A PRODUCT COST($000) Selling & Administration Costs($000) Administrative costs 1,658 Administrative cost 1,658 Building and machine depreciation (75% of this amount is for factory) 900 Manufacturing Overhead 675 Administrative Expenses 225 (Manufacturing overhead=(0.75*900) Building utilities (90% of this amount is for factory) 1,310 Manufacturing Overhead 1179 Administrative Expenses 131 (Manufacturing overhead=(0.9*1310) Direct labor 845 Direct Labor cost 845 Direct materials inventory, December 31 14 Direct Material cost 3,626 Direct Material=Beginning Inventory + Purchase - Ending Inventory(10+3630-14) Direct materials inventory, January 1 10 Direct materials purchases 3,630 Factory supervision 481 Manufacturing Overhead 481 Finished goods inventory, December 31 69 Finished goods inventory, January 1 55 Indirect factory labor 915 Manufacturing Overhead 915 Indirect materials and supplies 679 Manufacturing Overhead 679 Marketing costs 879 Selling Expenses 879 Property taxes on building (85% of this amount is for factory) 800 Manufacturing Overhead 680 Administrative Expenses 120 (Manufacturing overhead=(0.85*800) Sales revenue 12,916 Work-in-process inventory, December 31 25 Work-in-process inventory, January 1 32 Total 9,080 3,013 Work in process transferred to Finished goods Inventory: A Beginning Work in Process 32 B Add:Direct Material 3,626 C Add:Direct Labor 845 D Add:Manufacturing Overhead 4609 (675+1179+481+915+679+680) E Less:Ending Work in process 25 F=A+B+C+D-E Work in process transferred to Finished goods Inventory 9,087 COST OF GOODS SOLD STATEMENT G Beginning Finished goods inventory 55 H Add:Transferred from Work in process 9,087 I Less: Ending Finished goods inventory 69 J=G+H-I Cost of goods sold 9,073 INCOME STATEMENT Figures in ($ 000) Sales Revenue 12,916 Cost of goods sold 9,073 Gross Profit 3,843 Selling & Administrative expenses 3,013 Operating Income 830