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The following cost and inventory data are taken from the accounting records of Mason Company for the year just completed: (5-Marks) Sales ..................................................$555,000 Costs incurred:  Direct labor cost ..............................$66,000

The following cost and inventory data are taken from the accounting records of Mason Company for the year just completed: (5-Marks) Sales ..................................................$555,000 Costs incurred:  Direct labor cost ..............................$66,000

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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Q-1: The following cost and inventory data are taken from the accounting records of Mason Company for the year just completed: (5-Marks)

  • Sales ..................................................$555,000

Costs incurred: 

  • Direct labor cost ..............................$66,000
  • Purchases of raw materials............ $118,000
  • Manufacturing overhead................ $70,000
  • Advertising expense........................ $90,000
  • Sales salaries.................................... $55,000
  • Depreciation, office equipment......$3,000

 

Date: ............................1/1/2020 to 31/12/2020 

  • Inventories:
  • Raw materials ......$8,000 ............$26,000
  • Work in process ...$15,000.......... $12,000
  • Finished goods .....$21,000......... $35,000

 

Calculate then report the number only:

 

Step-1: calculate the Cost of goods Manufactured : .............

 

Step- 2: Calculate the Cost of good available for sale: ...........

 

Step-3: Calculate the Gross Margin (income before non manufacturing overhead) : ............

 

Step-4: Calculate the Net Operating Income: .............

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