Alwar Brothers is a small, family-owned business that produces animal feed for dairy farms. The administrative offices and manufacturing plant of Alwar share the same building. Financial records provided by the company for the most recent fiscal year sho the following (all amounts in thousands of dollars): Sales revenue Direct materials purchases Administrative costs Utilities (Note A) Indirect factory labor Marketing costs Direct labor Depreciation (Note B) Property taxes (Note C) Factory supplies. Factory supervision Finished goods inventory, December 31 Finished goods inventory, January 1 Work-in-process inventory, January 1 Work-in-process inventory, December 31 Direct materials inventory, December 31 Direct materials inventory, January 1 Notes: A. 80% of this amount is for the factory. B. 85% of this amount is for the factory. C. 60% of this amount is for the factory. Required: a. Prepare a cost of goods sold statement. b. Prepare an income statement. ($000) $ 8,985.0 2,158.0 1,076.0 910.0 666.0 632.0 521.0 580.0 570.0 515.0 411.0 46.0 41.0 16.1 14.2 13.1 10.2

Alwar Brothers is a small, family-owned business that produces animal feed for dairy farms. The administrative offices and manufacturing plant of Alwar share the same building. Financial records provided by the company for the most recent fiscal year sho the following (all amounts in thousands of dollars): Sales revenue Direct materials purchases Administrative costs Utilities (Note A) Indirect factory labor Marketing costs Direct labor Depreciation (Note B) Property taxes (Note C) Factory supplies. Factory supervision Finished goods inventory, December 31 Finished goods inventory, January 1 Work-in-process inventory, January 1 Work-in-process inventory, December 31 Direct materials inventory, December 31 Direct materials inventory, January 1 Notes: A. 80% of this amount is for the factory. B. 85% of this amount is for the factory. C. 60% of this amount is for the factory. Required: a. Prepare a cost of goods sold statement. b. Prepare an income statement. ($000) $ 8,985.0 2,158.0 1,076.0 910.0 666.0 632.0 521.0 580.0 570.0 515.0 411.0 46.0 41.0 16.1 14.2 13.1 10.2

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Manufacturing Costs

Manufacturing cost is the total cost of procuring or producing a product. In other words, the manufacturing cost is the cost that an individual or business owner undertakes for the manufacturing of goods.

Question

Alwar Brothers is a small, family-owned business that produces animal feed for dairy farms. The administrative offices and
manufacturing plant of Alwar share the same building. Financial records provided by the company for the most recent fiscal year show
the following (all amounts in thousands of dollars):
Sales revenue
Direct materials purchases
Administrative costs
Utilities (Note A)
Indirect factory labor
Marketing costs
Direct labor
Depreciation (Note B)
Property taxes (Note C)
Factory supplies
Factory supervision
Finished goods inventory, December 31
Finished goods inventory, January 1
Work-in-process inventory, January 1
Work-in-process inventory, December 31
Direct materials inventory, December 31
Direct materials inventory, January 1
Notes:
A. 80% of this amount is for the factory.
B. 85% of this amount is for the factory.
C. 60% of this amount is for the factory.
Required:
a. Prepare a cost of goods sold statement.
b. Prepare an income statement.
($000)
$ 8,985.0
2,158.0
1,076.0
910.0
666.0
632.0
521.0
580.0
570.0
515.0
411.0
46.0
41.0
16.1
14.2
13.1
10.2

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