Advertising expenses Depreciation expenseadmin office Deprec

Advertising expenses Depreciation expense-admin. office Depreciation expense-plant and equip Depreciation expense-delivery trucks Direct materials inventory, beginning Direct materials inventory, ending Direct materials purchases Direct labor Indirect labor Finished goods inventory, beginning Finished goods inventory, ending Insurance on plant Heat and light for plant Repairs on plant building Supervisor\'s salary-plant Supplies-plant Supplies-administrative office Work-in-process inventory, beginning Work-in-process inventory, ending Sales representatives\' salaries Sales revenue s150,000 75,000 320,000 410,000 269,000 22,000 36,000 98,000 132,000 39,000 325,000 2,885,000 Required Prepare a statement of cost of goods manufactured and an income statement for Fair Wind Yachts, Inc., for the year ended December 31

Solution

T-accounts:

Fair Wind Yatchs, Inc.
Statement of Cost of Goods Manufactured
For the Year Ended December 31
Work in process inventory, beginning			31000
Direct materials:
Direct Materials inventory, beginning	16000
Add: Purchases	410000
Cost of materials available for use	426000
Less: Direct Materials inventory, ending	18000
Cost of direct materials used in production		408000
Direct labor		512000
Factory overhead:
Indirect labor	269000
Depreciation expense-plant and equip.	320000
Insurance on plant	32000
Heat and light for plant	22000
Repairs on plant building	36000
Supervisor\'s salary-plant	98000
Supplies-plant	132000
Total factory overhead		909000
Total manufacturing costs incurred			1829000
Total manufacturing costs			1860000
Less: Work in process inventory, ending			39000
Cost of goods manufactured			1821000