Ron Howard recently took over as the controller of Johnson Brothers Manufacturing. Last month, the previous controller
Question:
Ron Howard recently took over as the controller of Johnson Brothers Manufacturing. Last month, the previous controller left the company with little notice and left the accounting records in disarray. Ron needs the ending inventory balances to report first-quarter numbers.
For the previous month (March 2020) Ron was able to piece together the following information:
Direct materials purchased
$120,000
Work-in-process inventory, 3/1/2020
$ 40,000
Direct materials inventory, 3/1/2020
$ 12,500
Finished-goods inventory, 3/1/2020
$120,000
Conversion costs
$330,000
Total manufacturing costs added during the period
$420,000
Direct labor
1.5 times direct materials used
Cost of goods manufactured
4 times direct materials used
Gross margin as a percentage of revenues
25%
Revenues
$540,000
Selling, General & Administrative costs
60,000
Required:
1. Prepare the schedule of Cost of goods manufactured and income statement.
2. Show the following figures on 3/31/2020: Finished-goods inventory, Work-in-process inventory,
3. Direct materials used, direct labor, and manufacturing overhead.
Cost Accounting A Managerial Emphasis
ISBN: 978-0133428704
15th edition
Authors: Charles T. Horngren, Srikant M. Datar, Madhav V. Rajan