Answer:
Instructions are listed below.
Explanation:
Giving the following information:
Sales $315,000
Selling and administrative expenses 127,500
Purchases of raw materials 45,000
Direct labor 30,000
Manufacturing overhead 55,500
Inventories:
August 1:
Raw materials= $8,000
Work-in-process= $14,000
Finished goods= $15,000
August 31
Raw materials $ 5,000
Work-in-process $11,000
Finished goods $19,000
cost of goods manufactured= beginning WIP + direct materials + direct labor + allocated manufacturing overhead - Ending WIP
cost of goods manufactured= 14,000 + (8,000 + 45,000 - 5,000) + 30,000 + 55,500 - 11,000= $136,500
COGS= beginning finished inventory + cost of goods manufactured - ending finished inventory
COGS= 15,000 + 136,500 - 19,000= $132,500
Income statement:
Sales= 315,000
COGS= 132,500
Gross profit= 182,500
Selling and administrative expenses= 127,500
Net operating profit= $55,000
