E14-10

CASE A CASE B
a Total Manufacturing Cost $ 195,650 d Direct Material used $ 68,400
Direct Labor $ 57,000 - Direct Labor $ 86,000 +
Manufacturing Overhead $ 46,500 - Manufacturing Overhead $ 81,600 +
Direct Material Used $ 92,150 Total Manufacturing Cost $ 236,000

b Total Cost of Work In Proses $ 221,500 e Total Manufacturing Cost $ 236,000

Total Manufacturing Cost $ 195,650 - Work In Proses 1/1/14 $ 16,500 +
Work In Proses 1/1/14 $ 25,850 Total Cost of Work In Proses $ 252,500

c Total Cost of Work In Proses $ 221,500 f Total Cost of Work In Proses $ 252,500
Cost of goods manufactured $ 185,275 - Work In Proses 12/31/14 $ 11,000 -
Work In Proses 12/31/14 $ 36,225 Cost of goods manufactured $ 241,500
 CASE C
g Total Manufacturing Cost $ 253,700
Direct Material used $ 130,000 -
Manufacturing Overhead $ 102,000 -
Direct Labor $ 21,700

h Total Cost of Work In Proses $ 337,000

Total Manufacturing Cost $ 253,700 -
Work In Proses 1/1/14 $ 83,300

i Total Cost of Work In Proses $ 337,000

Work In Proses 12/31/14 $ 70,000 -
Cost of goods manufactured $ 267,000
 LOPEZ CORPORATION
Cost of Goods Manufactured
For the Month Ended December 31

Depreciation on plant $ 60.000

Factory supplies used $ 23,000
Property taxes on plant $ 14,000
Manufacturing overhead $ 97,000
Materials used in product $ 120,000
labour cost $ 110,000
Manufacturing overhead $ 97,000
Total manufacturing costs $ 327,000
Beginning work in proses $ 12,000
Less : Ending work in proses ($ 15,500)
Cost of goods manufactured $ 323,500
 LOPEZ CORPORATION
Cost of Goods Sold
For the Month Ended December 31

Cost of goods manufactured $ 323,500

Beginning finished goods inventory $ 60.000
Less : Ending finished goods inventory ($ 45,600)
Cost of goods sold $ 337,900
A
AIKMAN COMPANY
Cost of Goods Manufactured
For December 31. 2014

Particulars
Raw materials inventory, at beginning $ 21,000
Purchases $ 150,000
Cost of materials available for use $ 171,000
Less: Raw materials inventory, at end ($ 30,000)
Cost of Direct materials used $ 141,000
Direct Labor $ 220,000
Factory overhead $ 180,000
Total manufacturing cost $ 541,000

Work in process, at beginning $ 13,500

less : Work in process, at end ($ 17,200)

Cost of goods manufactured $ 537,300

B
AIKMAN COMPANY
Income Statement
For December 31. 2014

Sales revenue $ 910,000

Finished goods at end $ 21,000
Finished goods at beginning $ 27,000
Cost of goods manufactured $ 537,300
Gross profit $ 366,700
$ 931,000 $ 931,000
C
AIKMAN COMPANY
Partial Balance Sheet
For December 31. 2014

Current assets
Inventories :
Raw material $ 30,000
Work in process $ 17,200
Finished goods $ 21,000

Total $ 68,200

D
In a merchandising company's income statement,
the only difference would be in the computation of cost of goods sold.
Beginning and ending
finished goods would be replaced by beginning and ending merchandise
inventory. And cost of
goods manufactured would be replaced by purchases.
In a merchandising company's balance
sheet, there would be one
inventory account (merchandise inventory) instead of three.