Question

The following information is available for Bandera Manufacturing Company for the month ending January 31:

Cost of goods manufactured $131,860
Selling expenses 44,050
Administrative expenses 23,290
Sales 280,560
Finished goods inventory, January 1 31,700
Finished goods inventory, January 31 28,900
For the month ended January 31, determine Bandera's
(a) cost of goods sold,
(b) gross profit, and
(c) net income
(a) Bandera Manufacturing Company Cost of Goods Sold January 31
(b) Bandera Manufacturing Company Gross Profit January 31
(c) Bandera Manufacturing Company Net Income January 31
Operating expenses:
Total operating expenses
The following events took place for Digital Vibe Manufacturing Company during January, the first month of its operations as a producer of digital video monitors:
a. Purchased $48,300 of materials
b. Used $37,200 of direct materials production.
c. Incurred $55,500 of direct labor wages.
d. Incurred $78,200 of factory overhead. process to finished goods.
e. Transferred $129,900 of work
f. Sold goods for $232,300.
g. Sold goods with a cost of $103,400.
h. Incurred $59,400 of selling expenses .
Incurred $26,100 of administrative expense.
Using the information given, complete the following:
a. Prepare the January income statement for Digital Vibe Manufacturing Company. Digital Vibe Manufacturing Company Income Statement For the Month Ended January 31 Operating expenses: Total operating expenses
b. Determine the Materials Inventory, Work in Process Inventory, and Finished Goods Inventory balances at the end of the first month of operations. Digital Vibe Manufacturing Company Inventory Balances For the Month Ended January 31 Inventory balances on January 31: Materials Work in process Finished goods

Answer 1

Bandera Manufacturing Company

a) Cost of goods sold:

Finished goods inventory, January 1 31,700

Cost of goods manufacturing 131,860

Finished goods inventory, January 31 28,900

Cost of goods sold $134,660

b) Gross profit

Sales $280,560

Cost of goods sold 134,660

Gross profit $145,900

c) Net Income

Gross profit $145,900

Selling expenses 44,050

Administrative expenses 23,290

Net Income $78,560

Digital Vibe Manufacturing Company

Digital Vibe Manufacturing Company:

Sales Revenue $232,300

Cost of goods sold 103,400

Gross profit 128,900

Selling expenses 59,400

Administrative exp. 26,100

Net Income $43,400

a. Income Statement for the month ended January 31:

Operating expenses:

Selling expenses 59,400

Administrative exp. 26,100

Total operating expenses 85,500

b. Digital Vibe Manufacturing Company

Inventory Balances For the Month Ended January 31

Inventory balances on January 31:

Raw materials 11,100

Work in process 41,000

Finished goods 26,500

Step-by-step explanation:

a) Data and Calculations:

Digital Vibe Manufacturing Company

Purchases $48,300

less Inventory 11,100

Cost of materials used 37,200

Direct labor 55,500

Factory overhead 78,200

Cost of manuf. 170,900

Transferred to

finished goods 129,900

WIP inventory 41,000

Transferred to

finished goods 129,900

Cost of goods sold 103,400

Inventory of finished 26,500

Selling expenses 59,400

Administrative exp. 26,100