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How does the format of the income statement for a manufacturing concern differ from the income  statement of a merchandising business?

How does the format of the income statement for a manufacturing concern differ from the income  statement of a merchandising business?

FINANCIAL ACCOUNTING
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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How does the format of the income statement for a manufacturing concern differ from the income  statement of a merchandising business? 

Part 1 Canine Nutritionists is a manufacturer of grains for dogs. The following information pertains to operations during the 2021 calendar year. Inventory Data: Raw Materials Indirect Materials 1/1/2021 Purchases 31/12/2021 $750,000 $4,330,000 55,000 320,000 924,000 1,142,600 Work in Progress Finished Goods The following additional information is also available: Sales Revenue Direct Factory Labor Indirect Factory Labor Total Depreciation ¹ Total Utilities 2 Distribution & Customer Service Costs Insurance on Plant & Equipment Property Taxes 3 Administrative Wages & Salaries Advertising Expenses Sales Commission n/a n/a $807,000 71,500 814,750 1,720,200 $14,776,000 4,371,000 1,232,250 400,000 525,000 76,800 585,000 90,000 1,076,000 57,700 5% of Sales Revenue 1 Of the total depreciation, 80% relates to factory plant & equipment and 20% relates to general and administrative costs. 2 Of the total utilities, 75% relates to manufacturing and 25% relates to general and administrative costs. 3 The property taxes should be shared: 85% manufacturing & 15% general & administrative costs.
Transcribed Image Text:Part 1 Canine Nutritionists is a manufacturer of grains for dogs. The following information pertains to operations during the 2021 calendar year. Inventory Data: Raw Materials Indirect Materials 1/1/2021 Purchases 31/12/2021 $750,000 $4,330,000 55,000 320,000 924,000 1,142,600 Work in Progress Finished Goods The following additional information is also available: Sales Revenue Direct Factory Labor Indirect Factory Labor Total Depreciation ¹ Total Utilities 2 Distribution & Customer Service Costs Insurance on Plant & Equipment Property Taxes 3 Administrative Wages & Salaries Advertising Expenses Sales Commission n/a n/a $807,000 71,500 814,750 1,720,200 $14,776,000 4,371,000 1,232,250 400,000 525,000 76,800 585,000 90,000 1,076,000 57,700 5% of Sales Revenue 1 Of the total depreciation, 80% relates to factory plant & equipment and 20% relates to general and administrative costs. 2 Of the total utilities, 75% relates to manufacturing and 25% relates to general and administrative costs. 3 The property taxes should be shared: 85% manufacturing & 15% general & administrative costs.
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