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

Exercise 17

Prepare Statements for a Manufacturing Company

Pioneer Parts, a manufacturer of windows for commercial buildings, reports the following account information for last year (all costs are in thousands of dollars):

Information on January 1 (Beginning):
Direct materials inventory	$ 18
Work-in-process inventory	24
Finished goods inventory	328

 

Information for the year:
Administrative costs	$ 720
Direct labor	2,120
Direct materials purchases	1,640
Factory and machine depreciation	2,320
Factory supervision	420
Factory utilities	180
Indirect factory labor	560
Indirect materials and supplies	140
Marketing costs	300
Property taxes on factory	56
Sales revenue	9,080

 

Information on January 31 (Ending):
Direct materials inventory	$ 16
Work-in-process inventory	28
Finished goods inventory	294

Required

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

Step 1 of 6

Cost of goods sold statement

Cost of goods sold statement shows cost of goods which are sold by company. The cost of goods sold is calculated by calculating cost of goods manufactured during the period. Cost of goods manufactured is calculated using work in process inventory and manufacturing costs incurred during the period.

Formula to calculate cost of goods manufactured

Formula to calculate cost of goods sold