question archive You have the following information about the activities of ABC Inc
You have the following information about the activities of ABC Inc
Subject:AccountingPrice:3.86 Bought5
You have the following information about the activities of ABC Inc. for 2016
Sales
500,000
Factory maintenance
24,000
Indirect labour
19,000
Direct Material purchases
98,000
Factory utilities
17,000
Ending Direct materials
16,000
General and Administrative expense
71,200
Beginning work-in-process inventory
26,000
Beginning finished goods inventory
63,000
Ending work-in-process inventory
34,000
Ending finished goods inventory
44,600
Beginning direct material inventory
13,000
Selling Expenses
67,600
Direct labour
83,000
Factory insurance
9,000
Indirect Materials
7,600
Amortization-Factory
30,000
Required:
1. What was the ending direct material inventory?
2. What was the total manufacturing cost?
3. What was the cost of goods manufactured?
4. What was the cost of goods sold?
5. Based on all the answers above, please calculate the net income for 2016.
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1)
Ending direct material inventory = 16000 (given)
2)
Direct material Used = Beginning direct material inventory + Direct Material purchases-Ending direct material inventory
Direct material Used = 13000+98000-16000
Direct material Used = 95000
Factory Overhead= Factory maintenance + Indirect labour + Factory utilities + Factory insurance + Indirect Materials + Amortization-Factory
Factory Overhead= 24000+19000+17000+9000+7600+30000
Factory Overhead= 106600
Total manufacturing cost = Direct material Used + Direct labour +Factory Overhead
Total manufacturing cost = 95000+83000 + 106600
Total manufacturing cost = 284600
3)
Cost of goods manufactured = Beginning work-in-process inventory + Total manufacturing cost - Ending work-in-process inventory
Cost of goods manufactured = 26000+284600-34000
Cost of goods manufactured = 276600
4)
Cost of goods sold = Cost of goods manufactured + Beginning finished goods inventory - Ending finished goods inventory
Cost of goods sold = 276600+63000-44600
Cost of goods sold = 295000
5)
Net income for 2016 = Sale - Cost of goods sold - Selling Expenses - General and Administrative expense
Net income for 2016 = 500000-295000-67600-71200
Net income for 2016 = 66200
