Case A Case B Case C

Direct Material used 92,150 68,400 130,000

Direct Labor 57,000 86,000 21,700
Manufacturing overhead 46,500 81,600 102,000
Total manufacturing costs 195,650 236,000 253,700
Work in process 1/1/14 25,850 16,500 83,300
Total cost of work in process 221,500 252,500 337,000
Work in process 12/31/14 36,225 11,000 70,000
Cost of good manufactured 185,275 241,500 267,000
a. Compute cost of goods manufactured
Lopez Corparation
Cost of Good Manufactured
December '31
Work in process, Jan 1
Direct materials
Material used in product
Direct Labour
Manufacturing Overhead
Depreciation on plant 60,000
Factory supplies used 23,000
Property taxes on plant 14,000
Total Manufacturing Overhead
Total Manufacturing Costs
Total cost of work in process
Less: Work in process, December 31
Cost of goods manufactured

b. Compute cost of goods sold

Lopez Corparation
Cost of Good Sold
December '31
Cost of goods sold
Finished goods inventory, Jan 1
Cost of goods manufactured
Cost of goods available for sale
Less: Finished goods inventory
Cost of goods sold
 12,000

120,000
110,000

97,000
327,000
339,000
15,500
323,500

60,000
323,500
383,500
45,600
337,900
a. Compute cost of goods manufactured b. Prepare an income statement through gross pro
Aikman Company Aikman Company
Cost of Good Manufactured Income Statement
December 31,2014 December 31,2014
Work in process, January 1 2014 13,500 Sales Revenue
Direct Materials Cost of goods sold
Raw materia 21,000 Finished go 27,000
Raw materi 150,000 Cost of go 537,300
Total raw m 171,000 Cost of goo 564,300
Less: Raw 30,000 Less: Finis 21,000
Direct material used 141,000 Cost of goods sold
Direct labor 220,000 Gross profit
Manufacturing overhead 180,000
Total manufacturing costs 541,000
Total cost of work in process 554,500
Less: cost in process, December 31 17,200
Cost of goods manufactured 537,300

d. How would the income statement and balance sheet of a merchandising company be different from Aikman's fin
The different income statement between merchandising company from Aikman's is
the cost of good sold section. A merchandise compute cost of goods sold by adding
the beginning merchandise inventory to the cost of goods purchased and subtracting
the ending merchandise inventory. Manufacturers compute cost of goods sold by
adding the beginning finished goods inventory to the cost of manufactured and
subtracting the ending finished goods inventory.
The different balance sheet between merchandising company from Aikman's is the
current assets section. A merchandise company show just one category of inventory
and the manufacturer company may have three inventory accounts such as Raw
material inventory, Work in process inventory and finished goods inventory
e statement through gross profit c. Show the presentation of the endings inventories in the December 31, 2014, Balance sheet
Company Aikman Company
Statement Balance sheet
er 31,2014 December 31,2014
910,000 Current assets
Inventories
Finished g 21,000
Work in pr 17,200
Raw materi 30,000
Total current asset 68,200
543,300
366,700

be different from Aikman's financial statement

014, Balance sheet