Q37PGB - Horngren'S Financial And Managerial Accounting

Question

Preparing a schedule of cost of goods manufactured and an income statement for a manufacturing company 

Certain item descriptions and amounts are missing from the monthly schedule of cost of goods manufactured and income statement of Charlie Manufacturing Company. Fill in the blanks with the missing words, and replace the Xs with the correct amounts.

ing Direct Ending Direct Direct Manufacturing Overhead Total Costs Total Costs Ending Direct Materials Beginning Direct Materials Purchases of Direct Materials \( 26,000 \) X \( X X X (29,000) 177,000 50,000 \) X 51,000 81,000 (26,000) C

Net Sales Revenue Cost of Goods Sold Total Income Cost of Goods Sold: Gross Profit Expenses: Selling Expenses Administrative Expenses Cost of Goods Ending Beginning \( X 232,000 268,000 X 150,000 90,000 \) 118,000 X X X $ X CHARLIE MANUFACTURING COMPANY June 30

Step-by-Step Solution

Answer

The Cost of Goods Manufactured are $174,000 and the net operating income is $118,000.

Step-by-Step-Solution Step 1 Completion of schedule of cost of goods manufactured

Elly Manufacturing Company
Income Statement
Month Ended June 30, 2018
	Amount ($)	Amount ($)	Amount ($)
Beginning WIP Inventory			$26,000
Direct Material used:
Beginning Direct Material	$30,000
Purchases of direct material	51,000
Direct Material available for use	81,000
Ending Direct Materials	-26,000
Direct Materials Used		55,000
Direct Labor		72,000
Manufacturing overhead		50,000
Total manufacturing cost incurred during the month			177,000
Total manufacturing costs to account for			203,000
Ending WIP Inventory			-29,000
Cost of goods manufactured			$174,000

Working Notes: Missing amounts

Beginning Direct materials:
Direct material available for use	$81,000
Purchases of direct material	-51,000
Beginning Direct materials	$30,000
Direct materials Used:
Ending materials available for use	$81,000
Ending Direct Materials	-26,000
Direct materials used	$55,000
Direct Labor:
Total manufacturing costs incurred during the month	$177,000
MOH	-50,000
Direct materials used	-55,000
Direct Labor	$72,000
Total Manufacturing Costs to Account For:
Beginning Work-in-Process Inventory	$26,000
Total Manufacturing Costs Incurred During the Month	177,000
Total Manufacturing Costs to Account For	$203,000
Cost of Goods Manufactured:
Total Manufacturing Costs to Account For	$203,000
Ending Work-in-Process Inventory	-29,000
Cost of Goods Manufactured	$174,000

Step 2: Completion of Income statement

Elly Manufacturing Company
Income Statement
Month Ended June 30, 2018
	Amount ($)	Amount ($)
Net Sales Revenue		$500,000
Cost of goods Sold
Beginning finished goods inventory	$118,000
Cost of goods manufactured	174,000
Cost of goods available for sales	292,000
Ending Finished goods inventory	-60,000
Cost of goods sold		232,000
Selling and administrative Expenses:		268,000
Selling Expenses	90,000
Administrative Expenses	60,000
Total Selling and administrative Expenses		150,000
Operating Income		$118,000

Working Notes: Missing Amounts

Net Sales Revenue:
Cost of goods sold	$232,000
Gross Profit	268,000
Net Sales Revenue	$500,000
Cost of Goods Available for sale:
Beginning FG Inventory	$118,000
COGM	174,000
Cost of goods available for sale	$292.000
Ending Finished Goods Inventory:
Cost of goods available for sale	$292,000
COGS	-232,000
Ending FG Inventory	$60,000
Administrative Expenses:
Total selling and administrative expenses	$150,000
Selling Expenses	-90,000
Administrative Expenses	$60,000
Operating Income:
Gross Profit	$268,000
Total selling and administrative expenses	-150,000
Operating Income	$118,000