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StorSmart Company makes plastic organizing bins. The company has the following inventory balances at the beginning and end of March: Beginning Inventory Ending Inventory Raw materials $ 29,700 $ 25,600 Work in process 22,400 46,100 Finished goods 78,300 69,800 Additional information for the month of March follows: Raw materials purchases $ 41,600 Indirect materials used 1,200 Direct labor 62,900 Manufacturing overhead applied 36,700 Selling, general, and administrative expenses 24,300 Sales revenue 237,000 Required: 1. Based on the above information, prepare a cost of goods manufactured report. 2. Based on the above information, prepare an income statement for the month of March.

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Answer:

1. Cost of goods Manufactured Report

Beginning raw materials inventory                              $29,700

Add: Raw materials purchases                                     $41,600

Less: Indirect materials                                                  ($1,200)

Less: Ending raw materials inventory                        ( $25,600)

Direct materials used in production                             $44,500

Direct labor                                                                    $62,900

Manufacturing overhead                                              $36,700

Total current manufacturing costs                               $‭144,100‬

Add: Beginning work in process inventory                 $22,400

Less: Ending work in process inventory                     ($46,100)

Cost of goods manufactured                                 $‭120,400‬

2. Income Statement for March

Sales revenue                                                                  $237,000

Less: Cost of goods sold  

Cost of goods manufactured                               $120,400

Add: Beginning finished goods inventory         $78,300  

Less: Ending finished goods inventory                $69,800  

Cost of goods sold                                                                        ($‭128,900‬)

Gross profit                                                                                     $108,100

Less:

Operating expenses (selling & administrative expenses)          ( $24,300 )

Net operating income                                                                     $83,800