Fundamentals of Cost Accounting 3rd Edition by William N. Lanen, Shannon W. Anderson, Michael Maher

Exercise 18

Prepare Statements for a Manufacturing Company

The administrative offices and manufacturing plant of Oakdale Tool&Die share the same building. The following information (in $000s) appears in the accounting records for last year:

Administrative costs	$ 4,800
Building and machine depreciation
(75% of this amount is for factory)	2,700
Building utilities (90% of this amount is for factory)	3,750
Direct labor	2,520
Direct materials inventory, December 31	42
Direct materials inventory, January 1	36
Direct materials purchases	10,950
Factory supervision	1,470
Finished goods inventory, December 31	195
Finished goods inventory, January 1	162
Indirect factory labor	2,736
Indirect materials and supplies	2,055
Marketing costs	2,613
Property taxes on building
(80% of this amount is for factory)	2,520
Sales revenue	38,910
Work-in-process inventory, December 31	87
Work-in-process inventory, January 1	96

Required

Prepare an income statement with a supporting cost of goods sold statement.

Step 1 of 3

Prepare an income statement with supporting cost of goods sold statement:

Income statement:

An income statement reports the results of business transactions over a period, usually for a month or a year. In the income statement, total expenses are deducted from total revenues. When the total revenue exceeds total expenses over the period, the result is net income. When the total expenses exceed total revenue over the period, the result is net loss.

An income statement reports the results of business transactions over a period, usually for a month or a year.