2-47(30 min.) Prepare Statements for a Manufacturing Company: Pioneer Parts

Pioneer PartsStatement of Cost of Goods SoldFor the Year Ended December 31

($000)Work in process, Jan. 1 $  24Manufacturing costs: Direct materials:  Beginning inventory, Jan. 1 $  18  Add material purchases 1,640  Direct materials available 1,658  Less ending inventory, Dec. 31 16  Direct materials used $ 1,642 Direct labor 2,120 Manufacturing overhead:  Indirect factory labor 560  Indirect materials and supplies 140 Factory supervision 420  Factory utilities 180  Factory and machine depreciation 2,320  Property taxes on factory 56   Total manufacturing overhead 3,676    Total manufacturing costs 7,438Total cost of work in process during the year 7,462 Less work in process, Dec. 31 28  Costs of goods manufactured during the year 7,434Beginning finished goods, Jan. 1 328Finished goods inventory available for sale 7,762Less ending finished goods inventory, Dec. 31 294Cost of goods sold $7,468

2-47. (continued)

Pioneer PartsIncome Statement

For the Year Ended December 31($000)

Sales revenue $9,080Less: Cost of goods sold 7,468Gross margin 1,612Administrative costs $720Marketing costs 300Total marketing and administrative costs 1,020Operating profit $   592

2-48 (30 min.) Prepare Statements for a Manufacturing Company: Oakdale Tool & Die

.

Oakdale Tool & DieStatement of Cost of Goods SoldFor the Year Ended December 31

($ 000)Beginning work in process, Jan. 1 $   96Manufacturing costs: Direct materials:  Beginning inventory, Jan. 1 $  36  Add: Purchases 10,950   Direct materials available 10,986  Less ending inventory, Dec. 31 42   Direct materials used $10,944 Direct labor 2,520 Manufacturing overhead:  Indirect factory labor 2,736  Factory supervision 1,470  Indirect materials and supplies 2,055  Building utilities (90% of total) 3,375  Building & machine depreciation (75% of $2,700) 2,025  Property taxes—factory (80% of total) 2,016   Total manufacturing overhead 13,677    Total manufacturing costs 27,141Total cost of work in process during the year 27,237 Less work in process, Dec. 31 87 Costs of goods manufactured during the year 27,150Beginning finished goods, Jan. 1 162Finished goods available for sale 27,312Less ending finished goods, Dec. 31 195Cost of goods sold $   27,117

2-48. (continued)

Oakdale Tool & DieIncome Statement

For the Year Ended December 31($ 000)

Sales revenue $38,910Less: Cost of goods sold (per statement) 27,117Gross profit $ 11,793Marketing and administrative costs: Depreciation (25% of total) $ 675 Utilities (10% of total) 375 Property taxes (20% of total) 504 Administrative costs 4,800 Marketing costs 2,613 Total marketing and administrative costs 8,967Operating profit $   2,826

2-1.

2-53 (40 Min.) Find the Unknown Information.

a. Cost of goods sold

=Finished goods

beginning inventory+

Cost of goods manufactured

–Finished goods ending inventory

= $22,320 + $598,400 – $25,520Cost of

goods sold= $595,200

b. Total manufacturing

costs=

Direct materials

used+

Direct labor

+Manufacturing

overhead

$612,320 =Direct

materials used

+ $270,400 + $225,000

Direct materials used

= $116,920 (= $612,320 – $270,400 – $225,000)

c. Direct materials

used=

Beginning inventory

+Materials

purchased–

Ending inventory

$116,920 = $2,520 +Materials

purchased– $2,088

Materials purchased

= $116,488 (= 116,920 – $2,520 + $2,088)

d. Gross margin % = Gross margin ÷ Sales revenue

38%= (Sales revenue –

Cost of goods sold)÷ Sales revenue

38% x Sales revenue = Sales revenue – Cost of goods soldCost of goods sold = Sales revenue – (38% x Sales revenue)Cost of goods sold = Sales revenue x (1 – 38%)

Sales revenue = Cost of goods sold ÷ (100% – 38%)= $595,200 (from a) ÷ 62%

$960,000