Amora Manufacturing Company makes water heaters. Selected account balances on December 31, 2019, the end of its fiscal year, are given below. Data about the beginning and ending inventories are also given.

INSTRUCTIONS
1. Prepare a statement of cost of goods manufactured for 2019.
2. Prepare an income statement for 2019.

Accounts                                                                   Balances
Sales.........................................................................$1,106,500
Sales Returns and Allowances..........................................6,500
Materials Purchases......................................................202,500
Direct Labor...................................................................210,000
Indirect Labor...................................................................42,000
Payroll Taxes€”Factory....................................................20,000
Utilities€”Factory..............................................................25,000
Repairs and Maintenance€”Factory..................................5,000
Indirect Materials and Supplies.........................................7,000
Depreciation€”Factory Building.........................................6,000
Depreciation€”Factory Equipment....................................5,500
Insurance€”Factory.........................................................15,000

Property Taxes€”Factory...................................................9,000
Sales Salaries Expense................................................150,000
Payroll Taxes Expense€”Selling.....................................15,000
Delivery Expense..............................................................9,000
Advertising Expense.......................................................10,000
Miscellaneous Selling Expenses.....................................26,000
Officers€™ Salaries Expense............................................180,000
Office Salaries Expense..................................................50,000
Payroll Taxes Expense€”Administrative..........................23,000
Other Administrative Expenses.........................................4,000
Income Tax Expense.......................................................11,100

Analyze: For every dollar earned in net sales, what portion was spent on manufacturing costs?

Transcribed Image Text:

Dec. 31, 2019 Inventory Data Finished Goods Inventory Work in Process Inventory Raw Materials Inventory Jan. 1, 2019 $35,000 40,000 23,000 $30,000 35,000 21,000