Chapter 19, Problem 19.17E

(a)

To determine

Raw Materials: The materials which are used to produce finished goods or final product are called as raw materials.

Cost of Goods Sold: It includes direct material, direct labor, direct expenses, factory overheads, office and administrative overheads and adjustment of all kind of inventory in hand at beginning and end of the period. It is reduced from total sales to calculate the net profit of company.

Selling Expenses: The expenses which are incurred to promote or increase the sale of goods produced are called as selling expenses. Selling expenses are not included in cost of manufacture.

To determine: The cost of head lamps that would appear in each of the given accounts at September 30, 2017.

(b)

To determine

To prepare: Memo to indicate each account in income statement or balance sheet.