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Question No.1

1. Sales $2,000,000

Cost of goods sold.

Finish goods inventory January 1’st $ 300,000

Cost of goods manufactured $ 1,900,000

Cost of goods available for use $2,200,000

Finished goods inventory, Dec 31 $600,000

Cost of goods sold $1,600,000

Gross profit 20% on sales $400,000

Question No.2
1. Direct Materials;

Material inventory, Dec 31 19A $176,000

Purchases $2,400,000

Transportation in $32,000

Material available for use $2,608,000

Less material inventory, Dec 31 19B $196,000

Direct material consumed $2,412,000

Direct labor $3,204,000

Factory overhead $1,885,600

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Total manufacturing cost $7,501,600

Add work in process $129,800

$7,631,400

Less work in process $136,800

Cost of goods manufactured $7,494,600

Add finished goods, Dec 31, 19A $620,000

Cost of good available for sale $8,114,600

Less finished goods $467,400

Cost of goods sold $7,647,200

Question No.3 (1)

Ruthven Company
Cost of goods sold statement
For year ended Dec, 31 19...

Direct material;
Material inventory, Jan, 1, 19… $8,000
Purchase $36,000
Material available for use $44,000
Less material inventory, Dec, 31, 19… $8,500
Material consumed $35,500
Direct labor $15,000
F.O.H $10,000
Total manufacturing cost $60,500
Add work in process $8,000
$68,500
Less work in process $15,000
Cost of goods manufactured $53,500
Add finish goods inventory $7,000
Cost of goods available for sale $60,500
Less finished goods $10,200
Cost of goods sold $50,300

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Question No.3 (2)

Ruthven Company
Income statement
For year ended Dec, 31 19...

Sales $72,000
Less C.G.S $50,300
Gross profit $21,700
Less expense;
Marketing expense $3,600
Administrative expense $720 $4,320
Income from operation $17,380
Less other expense $360
Income before income taxes $17,020

Question no. 4(1)

Crowley, Inc.
Income statement
For the month ended September 30, 19…

Sales $182,000
Les cost of goods manufactured and sold $111,000
Gross profit $ 71,000
Less expense;
Marketing expense $14,100
General & administrative expense $22,900 $ 37,000
Income before income taxes $ 34,000

Question no. 4(2)

Crowley, Inc.
Cost of goods manufactured & sold
For the month ended September 30, 19…

Direct material;
Material inventory, September.1 $7,000
Purchase $42,500
Material available for use $49,500

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Less material inventory, September, 30 $7,400

Material consumed $41,900
Direct labor $30,000
F.O.H (150% of direct labor cost) $45,000
Total manufacturing cost $116,900
Add work in process $9,600
$126,500
Less work in process $13,000
Cost of goods manufactured $113,500
Add finished goods inventory, Sept, 1 $15,000
Cost of goods available for sale $128,500
Less finished goods inventory, Sept, 31 $17,500
Cost of goods sold $111,000

Question No. 5(1)

SHELIKOFF COMPANY
Income Statement
For the year ended December 31, 19…

Sales $314,000
Cost of goods sold;
Materials
Inventory, January 1, 19… $3,800
Purchase $140,000
Material available for use $143,800
Less inventory Dec.31 $4,300
Material consumed $139,500
Direct Labor $67,350
F.O.H $33,675
Total Manufacturing Cost $240,525
Add work in process inventory, January 1, 19… $4,600
$245,125
Less work in process inventory, Dec. 31, 19… $6,200
Cost of goods manufactured $238,925
Add finished goods, January 1, 19… $5,900
Cost of goods available for sale $244,825
Less finished goods, December 31, 19… $9,270
Cost of goods sold $235,555
Gross Profit $78,445
Expenses;

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Marketing expenses $23,115

Administrative expenses $17,650 $40,765
Income before income taxes $37,680

Question No. 5(2)

The percentage of income to sales, before

income tax.
Income before income tax / Sales x 100

= 37,680/314,000 x 100

= 12%

Question No. 6
METAXEN CORPORATION

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Cost of Goods Sold Statement

For the year ended December 31, 19…

Materials;
Materials, January 1, 19… $88,000
Purchase $366,000
Freight on material purchased $6,600 $372,000
Material available for use $460,600
Less material inventory, Dec 31. $64,000
Material consumed $396,600
Direct Labor $523,600
F.O.H $572,800
Total manufacturing coat $ 1,493,000
Add work in process inventory, Jan. 1, 19… $29,800
$ 1,522,800
Less work in process inventory, Dec 31, 19… $38,800
Cost of goods sold manufactured $ 1,484,000
Add finished goods, Jan. 1 19… $44,200
Cost of goods available for sale $ 1,528,200
Less finished goods, Dec. 31 19… $66,000
Cost of goods sold $ 1,462,200

Question No. 7
BROCKWAY CORPORATION
Cost of Goods Sold Statement

Direct material;
Material Beginning inventory $ 90,000
Purchase $198,000
Material available for use $288,000
Less ending inventory $ 95,000
Direct material used $193,000
Direct Labor $224,000
F.O.H $167,000
Total manufacturing cost $584,000
Add work in process beginning inventory $ 70,000
$654,000
Less work in process ending inventory $ 80,000
Cost of goods manufactured $574,000
Add finished goods beginning inventory $110,000
Cost of goods available for sale $684,000
Less finished goods ending inventory $ 95,000
Cost of good sol $589,000

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Question No. 8(1)

REINECKE, INC.
Cost of Goods Sold Statement
For the year ended March 31, 19…

Material used $440,000

Direct Labor $290,000
Factory overhead;
Indirect labor $46,000
Light & power $ 4,260
Depreciation $ 4,700
Repair to machinery $ 5,800

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Miscellaneous F.O.H $29,000

Total F.O.H $ 89,760
Total manufacturing cost $819,760
Add work in process, April 1, 19A $ 41,200
$860,960
Less work in process March 31, 19B $ 42,500
Cost of goods manufactured $818,460
Add finished goods, April 1, 19A $ 34,300
Cost of goods available for sale $852,760
Less finish goods, March 31, 19B $ 31,500
Cost of goods sold $821,260

Question No. 8(2)

The units cost of goods manufactured

Cost of goods manufactured / units manufactured

= 818,460 / 18,000
= 45.47%

Question No. 8(3)

Actual F.O.H $89,760
Less Applied F.O.H (30% of direct labor, 290.000) $87,000
Under applied factory overhead $2,760

Question No. 10

Rate of return on capital employed =Net income / capital employed x 100

= 40,000 / 400,000 x 100
= 10%

Question No. 11
Sales (1,200,000 / 10 x 100) $12,000,000
Cost of goods sold $ 7,200,000
Gross profit (40% of 12,000,000) $ 4,800,000
Less expense:

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Marketing expense $1,800,000

General & administrative expense $1,762,500 $ 3,562,500
Income from operation $ 1,237,500
Other expense:
Interest expense (2,000,000 x 37.5% x 5%) $ 37,500
Income before income taxes $ 1,200,000

Question No. 12
YUKON REFIGERATOR COMPANY
Income Statement
For three month ended March 31, 19…
Sale $ 6,634000
Cost of goods sold;
Materials;
Inventory, January 1.19… $268,000
Purchase $1,946,700
Material available for use $2,214,700
Less inventory, March 31 19… $167,000
Material consumed $2,047,000
Direct labor $2,125,800
Factory overhead $764,000
Cost of goods manufactured $4,937,500
Add finished goods, January 1 19… $43,000
Cost of goods available for sale $4,980,500
Less finished goods, March 31, 19... $79,000
Cost of goods sold $4,901,500
Gross profit $1,732,500
Commercial expense;
Marketing expense $516,000
General & administration expense $461,000 $977,000
Income before income taxes $755,500

Question No. 12(2)

Sales 12,400 units
Finished goods, March 31 200 units
Available for sale 12,600 units
Finished goods 100 units
Manufactured during period 12,5oo units

Question No. 12(3)

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Cost of goods manufactured / units manufactured

= 4,937,500 / 12,500
= 395/unit cost

Question No. 12(4)

Gross profit / units sold
= 1,732,500 / 12,400
= 139.718 gross profit per unit

Question No. 12(5)

Income before income taxes / units sold
= 755,500 / 12,400
= 60.927 income per unit

Question No. 12(6)

Gross profit / sales x 100
= 1,732,500 / 6,634,000 x 100
= 26.11%

Question No. 12(7)

Income before income taxes / sales x 100
= 755,500 / 6,634,000 x 100
= 11.39%

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