1) Pan Demic, Inc. (PDI) manufactures and sells cast iron skillets. A finished skillet sells for $40...
Question:
1) Pan Demic, Inc. (PDI) manufactures and sells cast iron skillets. A finished skillet sells for $40 and costs $15 to manufacture. PDI uses one raw material, iron ore, which is buys for $8/pound. Skillet Forgers heat the iron ore and form it into skillets. Forgers are paid $55/hour.
During the period, PDI purchased 800 pounds of Iron Ore. At the end of the period, they transferred 1,000 pounds of Iron Ore to WIP. They used 150 hours of direct labor and incurred $12,400 of Factory Overhead.
PDI ended the period with $4,850 in WIP and 210 skillets in Finished Goods.
Prepare the Schedule of Cost of Goods Manufactured for PDI.
Do not use dollar signs. Use whole numbers only (no decimal places)
Statement of Cost of Goods Manufactured | |
Direct materials used | |
Direct labor | $8,250 |
Factory overhead | $12,400 |
Manufacturing costs for the period | $23,250 |
WIP beginning inventory | |
WIP ending inventory | $4,850 |
Total Cost of goods manufactured (Transferred to Finished Goods) | $21,400 |
2)
PDI Balance Sheet | |
Account | Amount |
Raw Materials Inventory | $2,400 |
WIP Inventory | $4,700 |
Finished Goods Inventory | $3,150 |
Total Inventory | $10,250 |
Based on your work above, compete the Income Statement through Gross Profit for PDI
Do not use the dollar sign ($). Use whole numbers only (no decimal places).
PDI Income Statement | |
Account | Amount |
Sales | |
Cost of Goods Sold | |
Gross Profit | $31,250 |
What is PDI's Gross Margin (gross profit %) (carry to two decimal places)
3)
PDI Schedule of Raw Materials | |
Account | Dollar Amount |
Raw Materials Beginning Inventory | $1,000 |
Purchases | $4,000 |
Raw materials available for use | $5,000 |
Raw Materials Ending Inventory | $2,400 |
Direct Materials Used (transferred to WIP) | $2,600 |
Based on your work above for Period 2, compete the Income Statement through Gross Profit for PDI
Do not use the dollar sign ($). Use whole numbers only (no decimal places).
PDI Income Statement | |
Account | Amount |
Sales | |
Cost of Goods Sold | |
Gross Profit |
4)
PDI Balance Sheet | |
Account | Amount |
Raw Materials Inventory | |
WIP Inventory | |
Finished Goods Inventory | $3,150 |
Total Inventory |
Principles of Auditing and Other Assurance Services
ISBN: 978-0078025617
19th edition
Authors: Ray Whittington, Kurt Pany