Question

The following data (in thousands of dollars) have been taken from the acounting records of Rayburn Corporation for the current year.

Sales $ 1,980
Selling expenses 280
Manufactured overhead 460
Direct Labor 400
Administrative expenses 300
Purchases of raw materials 240
Finished goods inventory, beginning 240
Finished goods inventory, ending 320
Raw materials inventory, beginning 80
Raw materials inventory, ending 140
Work in process inventory, beginning 140
Work in process inventory, ending 100



REQUIRED: (Present all reports in thousands of dollars)
(A.) What was the cost of the raw materials used in production during the year?
(B.) What was the cost of goods manufactured (finished) for the year?
(C.) What was the cost of goods sold for the year?
(D.) What was the net income for the year?

Answer 1

a. Raw materials used = $180

b. Cost of goods manufactured = $1,080

c. Cost of goods sold = $1,000

d. Net income = $400

Step-by-step explanation:

The computation of given question is below:-

a. Raw materials used

= Raw materials inventory,beginning + Purchases of raw-materials - Raw materials inventory,ending

= $80 + $240 - $140

= $180

b. Cost of goods manufactured

= Raw materials used in production + Direct labor + Factory overhead + Work in process inventory, beginning - Work in process inventory,ending

= $180 + $400 + $460 + $140 - $100

= $1,080

c. Cost of goods sold

= Finished goods inventory, beginning + Cost of goods manufactured - Finished goods inventory, ending

= $240 + $1,080 - $320

= $1,000

d. Net income

= Sales - Cost of goods sold - Administrative expenses - Selling expenses

= $1,980 - $1,000 - $300 - $280

= $400