Problem 17: Income Statement Mark Inc. is engaged in the business of manufacturing basket balls. The company employs actual costing system. The company uses a single account for direct and indirect materials. The company provided the follwoing date for the year ended December 31, 2016: Gross sales 9,500,000 Sales returns 500,000 Gross pirchases 1,000,000 Purchase returns, allowances and discount 200,000 Freight in 400,000 Total costs of factory labor 1,000,000 Depreciation of factory assets 300,000 Expired insurance on factory assets 100,000 Utilities expense on factory 500,000 Total administrative expenses 2,000,000 Total marketing expenses 3,000,000 Inventories as follows: January 1 December 31 Raw materials 100,000 300,000 Work in process ? 200,000 Finished goods 500,000 600,000 The following additional data are provided: The net profit ratio of the company before income tax for the year ended Decmebr 31, 2016 was 10% of net sales. The direct labor cost for the year was four times the cost of indirect labor. The cost of indirect materials used was P100,000. Required: Compute for the following Prime Cost d. Cost of goods sold Conversion cost e. Work in process Jan. 1, 2016 Cost of goods manufactured
Problem 17: Income Statement
Mark Inc. is engaged in the business of manufacturing basket balls. The company employs actual costing system. The company uses a single account for direct and indirect materials. The company provided the follwoing date for the year ended December 31, 2016:
Gross sales 9,500,000
Sales returns 500,000
Gross pirchases 1,000,000
Purchase returns, allowances and discount 200,000
Freight in 400,000
Total costs of factory labor 1,000,000
Expired insurance on factory assets 100,000
Utilities expense on factory 500,000
Total administrative expenses 2,000,000
Total marketing expenses 3,000,000
Inventories as follows:
January 1 December 31
Raw materials 100,000 300,000
Work in process ? 200,000
Finished goods 500,000 600,000
The following additional data are provided:
- The net profit ratio of the company before income tax for the year ended Decmebr 31, 2016 was 10% of net sales.
- The direct labor cost for the year was four times the cost of indirect labor.
- The cost of indirect materials used was P100,000.
Required: Compute for the following
- Prime Cost d. Cost of goods sold
- Conversion cost e. Work in process Jan. 1, 2016
- Cost of goods manufactured
Trending now
This is a popular solution!
Step by step
Solved in 5 steps
