Cost Management: A Strategic Emphasis 5th Edition by David Stout, Edward Blocher, Gary Cokins

Exercise 58

Cost of Goods Manufactured, Income Statement Consider the following information for Household Furnishings, Inc. for the year ended December 31, 2010:

Depreciation expense—Administrative office	$ 33,000
Depreciation expense—Plant and equipment	88,000
Direct labor—Wages	487,000
Direct materials inventory, Dec. 31, 2010	25,000
Direct materials inventory, Jan. 1, 2010	18,000
Direct materials purchases	155,000
Finished goods inventory, Dec. 31, 2010	38,000
Finished goods inventory, Jan. 1, 2010	15,000
Heat, light,&power—Plant	44,000
Indirect labor	25,000
Property taxes—Plant	34,000
Sales representatives’ salaries	145,000
Sales revenue	1,500,000
Factory supervisor’s salary	66,000
Supplies—Administrative office	16,000
Supplies—Plant	29,000
Work-in-Process inventory, Dec. 31, 2010	9,000
Work-in-Process inventory, Jan. 1, 2010	23,000

Required Prepare a statement of cost of goods manufactured and an income statement for Household Furnishings for the year ended December 31, 2010, similar to the one in Exhibit 3.15A.

Step 1 of 3

Statement of cost of goods manufactured (COGM):

A COGM statement includes the greater detail of cost of goods manufactured in an accounting period which is generally found on income statement.