Question

Amazon has the following information for the month of March.

Purchases $417,500
Materials inventory, March 1 83,300
Materials inventory, March 31 91,500
Direct labor 117,000
Factory overhead 102,000
Work in process, March 1 55,600
Work in process, March 31 77,900
Finished goods inventory, March 1 65,400
Finished goods inventory, March 31 82,200
Sales 1,167,000
Sales and administrative expenses 371,000

Prepare a (a) schedule of cost of goods manufactured, (b) an income statement for the month ended March 31, and (c) prepare only the inventory section of the balance sheet.

Answer 1

(a) schedule of cost of goods manufactured

Raw Materials 409,300

Direct labor 117,000

Factory overhead 102,000

Add Opening Work in process 55,600

Less Closing Work in process (77,900)

Cost of goods manufactured 606,000

(b) an income statement for the month ended March 31

Sales 1,167,000

Less Cost of Sales

Opening Finished goods inventory 65,400

Add Cost of Goods Manufactured 606,000

Less Closing Finished goods inventory (82,200) (589,200)

Gross Profit 577,800

Sales and administrative expenses (371,000)

Net Income 206,800

(c) the inventory section of the balance sheet

Materials inventory 91,500

Work in process 77,900

Finished goods inventory 82,200

Total 251,600

Step-by-step explanation:

(a) schedule of cost of goods manufactured

Materials Used in Production = Opening Materials inventory + Purchases - Closing Materials inventory

= 83,300 + 417,500 - 91,500

= 409,300

schedule of cost of goods manufactured

Raw Materials 409,300

Direct labor 117,000

Factory overhead 102,000

Add Opening Work in process 55,600

Less Closing Work in process (77,900)

Cost of goods manufactured 606,000

(b) an income statement for the month ended March 31

Sales 1,167,000

Less Cost of Sales

Opening Finished goods inventory 65,400

Add Cost of Goods Manufactured 606,000

Less Closing Finished goods inventory (82,200) (589,200)

Gross Profit 577,800

Sales and administrative expenses (371,000)

Net Income 206,800

(c) the inventory section of the balance sheet

Materials inventory 91,500

Work in process 77,900

Finished goods inventory 82,200

Total 251,600