Question

. Zoe Corporation has the following information for the month of March: Purchases $ 92,000 Materials inventory, March 1 6,000 Materials inventory, March 31 8,000 Direct labor 25,000 Factory overhead 37,000 Work in process, March 1 22,000 Work in process, March 31 23,500 Finished goods inventory, March 1 21,000 Finished goods inventory, March 31 30,000 Sales 257,000 Sales and administrative expenses 79,000 Prepare (a) a schedule of cost of goods manufactured, (b) an income statement for the month ended March 31, and (c) the inventory section of the balance sheet.

Answer 1

To prepare the schedule of cost of goods manufactured, calculate the total manufacturing cost by adding direct materials used, direct labor costs, and factory overhead costs. To prepare the income statement, calculate the cost of goods sold and subtract it along with sales and administrative expenses from sales revenue to calculate net income. The inventory section of the balance sheet includes ending balances of materials inventory, work in process inventory, and finished goods inventory.

Step-by-step explanation:

In order to prepare the schedule of cost of goods manufactured, we need to calculate the total manufacturing cost. This is done by adding the direct materials used, the direct labor costs, and the factory overhead costs. For Zoe Corporation, the calculation would be as follows:

• Direct materials used = Beginning materials inventory + Purchases - Ending materials inventory
• Direct labor costs
• Factory overhead costs

Once we have the total manufacturing cost, we can subtract the cost of goods completed from the beginning work in process inventory to find the cost of goods manufactured.

To prepare the income statement, we need to calculate the cost of goods sold, which can be found by adding the beginning finished goods inventory to the cost of goods manufactured and subtracting the ending finished goods inventory. We then subtract the cost of goods sold and sales and administrative expenses from the sales revenue to calculate the net income.

The inventory section of the balance sheet will include the ending balances of the materials inventory, work in process inventory, and finished goods inventory.

Answer 2

1. Cost of goods manufactured = $150,500

2. Net income = $36,500

3. Total Inventory = $61,500

Step-by-step explanation:

Requirement 1

Zoe Corporation

Schedule of cost of goods manufactured

For the month ended March 31

Direct Materials:

Beginning Materials inventory $6,000

Add: Raw materials purchases 92,000

Raw materials available for use $98,000

Less: Ending Raw Materials 8,000

Direct materials used $90,000

Direct Labor 25,000

Prime Cost $115,000

Factory overhead 37,000

Total manufacturing cost $152,000

Add: Work in process, March 1 22,000

Less: Work in process, March 31 (23,500)

Cost of goods manufactured $150,500

Requirement 2

Zoe Corporation

Income Statement for manufacturing company

For the month ended March 31

Sales revenue $257,000

Less: Cost of goods sold

Beginning finished goods inventory $ 21,000

Add: Cost of goods manufactured (Req.1) 150,500

Finished goods available for sale 171,500

Less: Ending finished goods inventory (30,000)

Cost of goods sold 141,500

Gross Profit $115,500

Less: Sales and administrative expenses 79,000

Net operating Income $36,500

Requirement 3

Zoe Corporation

Balance Sheet

As at March 31

Inventory:

Materials $8,000

Work-in-process 23,500

Finished goods 30,000

Total Inventory $61,500

Inventory consists of all the ending materials, ending work-in-process, and ending finished goods. All the ending items need to be shown in the balance sheet because those inventories will remain at hand at the end of the period.