Exercise 10-14 Cost of goods manufactured and sold LO 10-5 Thefollowing information pertains to Flaxman Manufacturing Company forMarch 2018. Assume actual overhead equaled applied overhead. March1 Inventory balances Raw materials $ 125,000 Work in process118,900 Finished goods 77,200 March 31 Inventory balances Rawmaterials $ 86,700 Work in process 146,200 Finished goods 80,500During March Costs of raw materials purchased $ 119,000 Costs ofdirect labor 101,900 Costs of manufacturing overhead 62,700 Salesrevenues 359,000 Required Prepare a schedule of cost of goodsmanufactured and sold. Calculate the amount of gross margin on theincome statement.
Exercise 10-14 Cost of goods manufactured and sold LO 10-5 Thefollowing information pertains to Flaxman Manufacturing Company forMarch 2018. Assume actual overhead equaled applied overhead. March1 Inventory balances Raw materials $ 125,000 Work in process118,900 Finished goods 77,200 March 31 Inventory balances Rawmaterials $ 86,700 Work in process 146,200 Finished goods 80,500During March Costs of raw materials purchased $ 119,000 Costs ofdirect labor 101,900 Costs of manufacturing overhead 62,700 Salesrevenues 359,000 Required Prepare a schedule of cost of goodsmanufactured and sold. Calculate the amount of gross margin on theincome statement.
Related questions
| Pirkl Corporation has providedthe following data for the month of March: |
| Inventories | Beginning | Ending | ||
| Raw materials | $ | 24,000 | $ | 39,000 |
| Work in process | $ | 13,000 | $ | 20,000 |
| Finished goods | $ | 46,000 | $ | 35,000 |
Additional Information:
| Raw materialspurchases | $ | 78,000 |
| Direct laborcost | $ | 84,000 |
| Manufacturingoverhead cost incurred | $ | 43,000 |
| Indirect materialsincluded in manufacturing overhead cost incurred | $ | 6,400 |
| Manufacturingoverhead cost applied to work in process | $ | 44,600 |
| Required: | |
| Prepare a Schedule ofCost of Goods Manufactured and a Schedule of Cost of Goods Sold.(Input all amounts as positive values. Omit the "$" sign inyour response.) |
| Schedule of Cost of Goods Manufactured | ||
| Directmaterials: | ||
| (Click to select)Beginning work inprocess inventoryBeginning finished goods inventoryEnding rawmaterials inventoryBeginning materials inventoryEnding work inprocess inventory | $ | |
| (Click to select)DeductAdd : (Clickto select)Ending work in process inventoryBeginning work in processinventoryFinished goods inventory, beginningPurchases of rawmaterialsRaw materials inventory, ending | ||
| Raw materials available for use | ||
| (Click to select)DeductAdd : (Clickto select)Ending work in process inventoryPurchases of rawmaterialsBeginning materials inventoryEnding raw materialsinventoryBeginning work in process inventory | ||
| Raw materials used in production | ||
| (Click to select)DeductAdd : (Clickto select)Beginning work in process inventoryindirect materialsincluded in manufacturing overhead incurredRaw materials inventory,endingEnding work in process inventoryRaw materials inventory,beginning | ||
| (Click toselect)Direct laborDirect materialsIndirect materialsIndirectlaborPurchase of raw materials | $ | |
| (Click to select)Rawmaterials inventory, endingEnding work in process inventoryRawmaterials inventory, beginningDirect laborPurchases of rawmaterials | ||
| (Click toselect)Manufacturing overhead applied to work in processinventoryBeginning work in process inventoryPurchases of rawmaterialsRaw materials inventory, beginningRaw materials inventory,ending | ||
| Total manufacturingcosts | ||
| (Click toselect)AddDeduct : (Click to select)Raw materials inventory,beginningRaw materials inventory, endingPurchases of rawmaterialsEnding work in process inventoryBeginning work in processinventory | ||
| (Click toselect)DeductAdd : (Click to select)Beginning work in processinventoryRaw materials inventory, beginningRaw materials inventory,endingPurchases of raw materialsEnding work in processinventory | ||
| Cost of goodsmanufactured | $ | |
| Schedule of Cost of Goods Sold | |
| (Click toselect)Cost of goods manufacturedCost of goods available forsaleFinished goods inventory, endingOverapplied overheadFinishedgoods inventory, beginning | $ |
| (Click toselect)DeductAdd : (Click to select)Unadjusted cost of goodssoldOverapplied overheadCost of goods manufacturedCost of goodsavailable for saleUnderapplied overhead | |
| (Click toselect)Unadjusted cost of goods soldCost of goods available forsaleCost of goods manufacturedFinished goods inventory,beginningFinished goods inventory, ending | |
| (Click toselect)AddDeduct : (Click to select)Overapplied overheadCost ofgoods manufacturedEnding finished goods inventoryUnderappliedoverheadCost of goods available for sale | |
| (Click toselect)Finished goods inventory, beginningUnderappliedoverheadFinished goods inventory, endingUnadjusted cost of goodssoldCost of goods manufactured | |
| (Click toselect)AddDeduct : (Click to select)Overapplied overheadCost ofgoods manufacturedUnderapplied overheadFinished goods inventory,endingCost of goods available for sale | |
| Adjusted cost ofgoods sold | $ |
1.) When products held in inventory are sold:
A.)Cost of Goods Sold is credited.
B.)Work in Process Inventory is credited.
C.)Finished Goods Inventory is credited.
D.)Finished Goods Inventory is debited.
2.)Since manufacturing costs (direct materials, direct labor,and overhead) are incurred in the process of manufacturing units ofproduct, these costs are credited t
| A.) | The Direct Materials Inventory, Direct Labor, and ManufacturingOverhead accounts respectively. |
| B.) | Liability accounts. |
| C.) | The Work in Process Inventory account. |
| D.) | The Cost of Goods Sold account. |
3.)Management accounting systems are designed to assistorganizations in the performance of all of the following functionsexcept:
| A.) | The assignment of decision-making authority over companyassets. |
| B.) | Planning and decision-making. |
| C.) | Monitoring, evaluating, and rewarding performance. |
| D.) | The preparation of income tax returns. |
4.)In a schedule of cost of finished goods manufactured, thefigure for total manufacturing costs:
| A.) May be less than the cost of direct materials used. | |
| B.) May be less than the direct labor costs assigned toproduction. | |
| C.) May be less than the manufacturing overhead applied toproduction. | |
| D.) May be less than the cost of finished goodsmanufactured. |
5.) When a manufacturing company purchases raw materials orcomponent parts to be used in manufacturing finished goods, thesecosts are initially debited to:
| A.) Expense accounts. | |
| B.) Raw Materials Inventory. | |
| C.) Finished Goods Inventory. | |
| D.) Manufacturing Overhead. |
6.) The wages paid to employees working directly on a company'sproducts would be shown as a:
| A.) Credit to Direct Labor. | |
| B.) Debit to Direct Labor. | |
| C.) Credit to Work in Process. | |
| D.) Debit to Manufacturing Overhead. |
7.) Amounts credited to the Work in Process inventory accountmay best be described as:
| A.) The cost of finished goods manufactured. | |
| B.) Total manufacturing costs charged to production. | |
| C.) The cost of goods sold. | |
| D.) Direct materials purchased, direct labor costs paid, andpayments for items classified as manufacturing overhead. |
Zachary Modems, Inc. acquired a subsidiary named Anywhere, Inc. (AI). AI manufactures a wireless modem that enables users to access the Internet through cell phones. The following trial balance was drawn from the accounts of the subsidiary:
| Cash | $ | 184,600 | ||||||
| Raw materials inventory | 3,680 | |||||||
| Work in process inventory | 5,530 | |||||||
| Finished goods inventory | 6,450 | |||||||
| Common stock | $ | 119,060 | ||||||
| Retained earnings | 81,200 | |||||||
| Totals | $ | 200,260 | $ | 200,260 | ||||
The subsidiary completed the following transactions during 2017:
1. Paid $55,380 cash for direct raw materials.
2. Transferred $46,160 of direct raw materials to work in process.
3. Paid production employees $73,860 cash.
4. Applied $48,910 of manufacturing overhead costs to work in process.
5. Completed work on products that cost $150,410.
6. Sold products that cost $131,950 for $167,950 cash. Record the recognition of revenue in a row labeled 6a and the cost of goods sold in a row labeled 6b.
7. Paid $18,450 cash for selling and administrative expenses.
8. Actual overhead costs paid in cash amounted to $50,710.
9. Closed the Manufacturing Overhead account. The amount of over- or underapplied overhead was insignificant (immaterial).
10. Made a $4,580 cash distribution to the owners
REQUIRED
A. Prepare a schedule of cost of goods manufactured and sold.
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