Question

Using the following data, Garcon Company Pepper Company Beginning finished goods inventory $ 12,000 $ 16,450 Beginning work in process inventory 14,500 19,950 Beginning raw materials inventory 7,250 9,000 Rental cost on factory equipment 27,000 22,750 Direct labor 19,000 35,000 Ending finished goods inventory 17,650 13,300 Ending work in process inventory 22,000 16,000 Ending raw materials inventory 5,300 7,200 Factory utilities 9,000 12,000 Factory supplies used 8,200 3,200 General and administrative expenses 21,000 43,000 Indirect labor 1,250 7,660 Repairs—Factory equipment 4,780 1,500 Raw materials purchases 33,000 52,000 Selling expenses 50,000 46,000 Sales 195,030 290,010 Cash 20,000 15,700 Factory equipment, net 212,500 115,825 Accounts receivable, net 13,200 19,450 References Section BreakExercise 18-8 Cost of goods manufactured and cost of goods sold computation LO P1, P2 1.value: 1.50 pointsPart 1 1. Complete the table to find the cost of goods manufactured for both Garcon Company and Pepper Company. HintsReferenceseBook & Resources Hint #1 Check my workPrevious attempt 2.value: 2.00 pointsRequired information You did not receive full credit for this question in a previous attempt Exercise 18-8 Part 2 2. Complete the table to calculate the cost of goods sold for both Garcon Company and Pepper Company.

Answer 1

Garcon company : cost of production $96,680 cost of good sold $91,030 Gross profit $104,000 Net profit $33,000

Pepper company : cost of production $139,860 cost of good sold $143,010 Gross profit $147,000 Net profit $58,000Explanation:

Garcon. Company

T Account Format

Manufacturing, Trading, Profit and Loss Account

Dr. Cr

$ $

Raw materials. Cost of production transferred

Beginning inventory 7,250. to trading account

Add: purchase 33,000. 96,680

----------

Total materials available 40,250

Less:Ending inventory 5,300

----------

Cost of raw materials consumed 34,950

Add: Direct Labour 19,000

-----------

Prime Cost. 53,950

Factory overhead

Rental cost 27,000

Factory utilities 9,000

Factory supplies used 8,200

Indirect labour 1,250

Repair of factory equipment 4,780

-----------

50,230

Add:Beginning WIP. 14,500

----------

64,730

Less: Ending WIP 22,000

---------

42,730

--------------- ------------------------

Cost of production. 96,680. 96,680

----------------- ---------------------------

Finished good

Beginning inventory 12,000. Sales 195,030

Add: Cost of production 96,680

----------

Goods available for sale 108,680

Less: ending finished good inventory 17,650

-----------

Cost of good sold. 91,030

Gross Profit c/d. 104,000

------------- -----------------

195,030. 195,030

------------------ ----------------------

Expenses

General & Administrative expenses 21,000. Gross Profit b/d 104,000

Selling expenses. 50,000

Net profit. 33,000

------------------ ----------------

104,000 104,000

------------------- -----------------

Pepper company

T Account Format

Manufacturing , Trading, Profit and Loss Account

Dr. Cr

$ $

Raw materials. Cost of production

Beginning inventory 9,000. Transferred to trading Account

Add: purchase. 52,000. 139,860

----------

Total materials available. 61,000

Less: Ending inventory. 7,200

-----------

Cost of raw materials consumed 53,800

Add: Direct Labour. 35,000

-----------

Prime Cost. 88,800

Factory overhead

Rental cost 22,750

Factory utilities 12,000

Factory supplied used 3,200

Indirect labour 7,660

Repair of Factory equipment 1,500

-----------

47,110

Add: Beginning WIP. 19,950

-----------

67,060

Less: Ending WIP. 16,000

-----------

51,060

------------- --------------

Cost of production. 139,860. 139,860

-------------- -----------------

Finished good

Beginninginventory 16,450. Sales 290,010

Add: Cost of production 139,860

--------------

Cost of good available for sale 156,310

Less:Ending inventory 13,300

-------------

Cost of good sold. 143,010

Gross Profit c /d. 147,000

------------ ----------------

290,010. 290,010

-------------- ------------------

Expenses

General &Administrative expenses 43,000. Gross Profit b /d 147,000

Add: Selling expenses. 46,000

----------------

89,000

Net profit 58,000

-------------- -----------------

147,000. 147,000

-------------- -------------------