Answer:
Instructions are listed below
Explanation:
Giving the following information:
Sales $ 1,217,000
Raw materials inventory, Dec. 31, 2016= 44,000
Work in process inventory, Dec. 31, 2016= 53,600
Finished goods inventory, Dec. 31, 2016= 68,900
Raw materials purchases 156,900
Direct labor 237,000
Factory computer supplies used 16,300
Indirect labor 41,000
Repairs—Factory equipment 5,250
Rent cost of factory building 51,000
Advertising expense 97,000
General and administrative expenses 142,000
Raw materials inventory, Dec. 31, 2017= 42,700
Work in process inventory, Dec. 31, 2017= 41,000
Finished goods inventory, Dec. 31, 2017= 66,400
First, we need to calculate the cost of goods manufactured during the period:
cost of goods manufactured= beginning work in process + direct materials + direct labor + manufacturing overhead - ending work in process
Direct materials= Beginning inventory + purchases - ending inventory= 44,000 + 156,900 - 42,700= $158,200
Manufacturing overhead= (Factory computer supplies used + Indirect labor Repairs—Factory equipment + Rent cost of factory building)= 16300 + 41000 + 5250 + 51000= $113,550
cost of goods manufactured= 53600 + 158200 + 237000 + 113550 - 41000= $521,350
Now, we can calculate the Cost of goods sold (COGS)
COGS= beginning finished inventory + cost of goods manufactured - ending finished inventory= 68900 + 521350 - 66400= $523,850
Income statement:
Sales= 1,217,000
COGS= 523850
Gross income= $693150
Advertising expense 97,000
General and administrative expenses 142,000
Operating income= $454,150
