Answer to Question #288200 in Accounting for Andinet

Question

ABC Company, a manufacturing firm, has supplied the following information from its accounting

Records for the year 2020

Purchases of raw materials Br.76,000

Direct labor cost 52,500

Supplies used 5,300

Factory insurance 1,050

Commissions paid 7,500

Factory supervision 9,675

Advertising 2,400

Material handling 11,000

Work-in-process inventory, January 1, 2020 47,500

Work-in-process inventory, December 31, 2020 42,000

Materials inventory, January 1, 2020 10,400

Materials inventory, December 31, 2020 28,500

Finished goods inventory, January 1, 2020 20,055

Finished goods inventory, December 31, 2020 10,750

Sales as of December 31, 2020 250,000

Sales as of December 31, 2020

Required

1. Prepare a statement of cost of goods manufactured. (10 points)

2. Prepare a statement of cost of goods sold. (5 points)

3. Prepare income statement (5-points)

Answer 1

Cost of Goods mannufactured

Direct Materials+ Direct Labour+ Manufacturing Overhead+ Opening WIP- Ending WIP

Direct Materials

Beginning Raw materials= 10,400

Purchases of R/M = 76000

Ending R/M =(28500)

=57,900

Direct Labour = 52500

Manufacturing cost( Material Handling cost)= 11,000

Opening WIP = 47,500

Closing WIP =(42,000)

=5,500

$\therefore COGM=57,900+52,500+11,000+5,500=126,900$

Cost of Goods Sold

= Opening stock of finished goods+Purchases-Closing stock of finished goods

Opening stock = 20,055

Purchases( COGM)=126,900

Closing Stock = (10750)

=136,205

Income statement

Sales =250,000

Cost of goods sold =(136,205)

Gross profit =113,795