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Direct material:
Raw material inventory,1 January $20,000
Add purchases for raw material 90000
Raw material available for use 110000
Deduct raw material inventory,31 December 12500
Raw material used 97500
Direct labour 100000
Manufacturing overhead:
Indirect material 5000
Indirect labour 7500
Depreciation:plant &equipment 30000
Electricity:plant 20000
Other manufacturing overhead 40000
Total manufacturing overhead 102500
Total manufacturing costs 300000
Work in progress inventory,1 January 20000
Subtotal 320000
Deduct work in progress inventory,31 December 15000
Cost of goods manufactured $305,000
Show how both costs schedules and the income statement will change if:
a)raw material purchases amounted to $9200
Schedule for cost of manufactured goods:
Raw material,1 January $20,000
Add purchases for raw material 92000(change figure)
Raw material in used 112000
Direct labour 100000
IM 5000
IL 8000
DPE 30000
OMOH 40000
TMOH 83000
TMC 295000
Sub total 378000
DWIP 15000
COGM $363,000
Schedule for cost of goods sold
2) FGOI 10000
Add COGM 363000
CGAS 373000
DFGI 25000
New COGS $348,000
Income statement
3) Sales revenue $475,000
LCOGS 348000
GROSS profit $127,000
SAE 75000
Profit before tax $52,000
Income Tax expense 45000
New net profit $7,000
ufactured for Nan's Fashions.
s Fashions.