Answer:
1. ON Company
a. $30,800
b. $854,000
c. $800,800
d. $827,400
e. $299,600
f. $182,000
Off Company
a. $581,560
b. $685,720
c. $195,300
d. $256,060
e. $399,280
f. $234,360
2.1 On Company
Statement of Cost of Goods Manufactured
For the month Ended December 31, 2016
Raw Material
Raw material, beginning $65,800
<u> Add:Purchases 282,800</u>
Raw materials available 348,600
<u>Less: Raw material, end 30,800</u>
Cost of raw material used 317,800
<u>Add: Direct labor 387,800</u>
Prime Cost 705,600
<u>Add: Factory overhead 148,400</u>
Manufacturing cost 854,000
Add: Work in process, beginning 119,000
<u>Less: Work in process, Ending 172,200 </u>
Cost of Goods Manufactured $800,800
2.2 Off Company
Statement of Cost of Goods Manufactured
For the month Ended December 31, 2016
Raw Material
Raw material, beginning $195,300
<u>Add:Purchases 581,560</u>
Raw materials available 776,860
<u>Less: Raw material, end 91,140</u>
Cost of raw material used 685,720
<u>Add: Direct labor 577,220 </u>
Prime Cost 1,262,940
<u>Add: Factory overhead 256,060 </u>
Manufacturing cost 1,519,000
Add: Work in process, beginning 208,320
<u> Less: Work in process, Ending 195,300 </u>
Cost of Goods Manufactured $1,532,020
3.1 On Company
Income Statement
For the month Ended December 31, 2016
Sales $1,127,000
<u>Less: Cost of goods sold 827,400</u>
Gross profit 299,600
<u>Less: Operating expenses 117,600</u>
Net Income $182,000
3.2 Off Company
Income Statement
For the month Ended December 31, 2016
Sales $1,944,320
<u>Less: Cost of goods sold 1,545,040 </u>
Gross profit 399,280
<u>Less: Operating expenses 234,360 </u>
Net Income 164,920
Explanation:
a1. To get the raw materials end balance, we have to add the raw materials beginning plus the purchases then deduct it from raw materials used in the given data.
a & b (Off Company). To compute the Raw materials used and purchases, we will begin with the given manufacturing cost amount, then deduct from it the factory overhead and direct labor to get the cost of materials used for the period. Then from it we add the raw material ending balance and add back the raw materials beginning to get the purchases for the month.
b. (On Company) Manufacturing cost is computed by adding cost of materials used and direct labor and factory overhead.
c. (On Company) To get the cost of goods sold, we add work in process beginning balance to the manufacturing cost we computed earlier and then deduct work in process ending balance.
c. (Off Company) to get the work in process end, we begin with the manufacturing cost and add work in process beginning then less the cost of goods manufactured.
d. (On Company) To get the cost of goods sold, we add cost of goods manufactured and finished goods beginning then deduct finished goods end.
d. (Off Company) To compute the finished goods end, we add cost of goods manufacture and finished goods beginning balance then deduct cost of goods sold from it.
e. (On Company) Gross profit is computed by deducting cost of goods sold $827,400 from the sales of $1,127,000
e. (Off Company) Gross profit is computed by deducting cost of goods sold $1,545,040 from the sales of $1,944,320
f. (On Company) Net income is computed by deducting Operating expense of $117,600 from Gross Profit $299,600
f. (Off Company) To compute operating expense we deduct Net income amount o0f $164,920 from the gross profit of $399,280
On Company
Statement of Cost of Goods Manufactured
For the month Ended December 31, 2016
Raw Material
Raw material, beginning $65,800
<u> Add:Purchases 282,800</u>
Raw materials available 348,600
<u>Less: Raw material, end 30,800</u>
Cost of raw material used 317,800
<u>Add: Direct labor 387,800</u>
Prime Cost 705,600
<u>Add: Factory overhead 148,400</u>
Manufacturing cost 854,000
Add: Work in process, beginning 119,000
<u>Less: Work in process, Ending 172,200 </u>
Cost of Goods Manufactured $800,800
Statement of Cost of Goods Sold
Finished goods, beginning $224,000
<u>Add: Cost of Goods Manufactured 800,800</u>
Cost of goods available for sale 1,024,800
<u>Less: Finished goods, ending 197,400</u>
Cost of goods sold $827,400
2.2 Off Company
Statement of Cost of Goods Manufactured
For the month Ended December 31, 2016
Raw Material
Raw material, beginning $195,300
<u>Add:Purchases 581,560</u>
Raw materials available 776,860
<u>Less: Raw material, end 91,140</u>
Cost of raw material used 685,720
<u>Add: Direct labor 577,220 </u>
Prime Cost 1,262,940
<u>Add: Factory overhead 256,060 </u>
Manufacturing cost 1,519,000
Add: Work in process, beginning 208,320
<u> Less: Work in process, Ending 195,300 </u>
Cost of Goods Manufactured $1,532,020
Statement of Cost of Goods Sold
Finished goods, beginning $269,080
<u> Add: Cost of Goods Manufactured 1,532,020 </u>
Cost of goods available for sale 1,801,100
<u> Less: Finished goods, ending 256,060 </u>
Cost of goods sold $1,545,040