X COMPANY has provided the following data for the month of March:

REQUIRED:
BEGINNING ENDING
DM inventory $25,000 $30,000
WIP inventory 16,000 18,000 1. Total DM available
Finished Goods inv. 36,000 59,000 2. Total DM
MARCH ACTIVITY 3. Total Manufacturing
$71,000
Overhead
DM purchases
4. Total Manufacturing Cost
83,000
DL incurred 5. Cost of Goods
Variable Overhead 58,000 Manufactured
Fixed Overhead
11,000 6. Cost of Goods Sold
Sales Commission 13,500 7. Sales Revenue
8. Gross Profit
Property Taxes on office 8,600
9. Operating Expenses
Sales Office Salaries 13,000
10. Operating Income
Shipping fee on customers 17,800
President’s Salaries 30,000

X COMPANY completed 100,000 units at a price of $8 each.

SOLUTIONS:

1. Total DM Available = (DM beg + DM purchases) = 25,000 + 71,000 = 96,000

2. Total DM = (Total DM Available – DM end) = 96,000 – 30,000 = 66,000
3. Total Manufacturing Overhead = (Variable Overhead + Fixed Overhead) = 58,000 + 11,000 = 69,000
4. Total Manufacturing Cost = DM + DL + MO = 66,000 + 83,000 + 69,000 = 218,000
5. Cost of Goods Manufactured = Total Man. Cost + WIP beg – WIP end= 218,000 + 16,000 – 18,000 = 216,000
6. Cost of Goods Sold = COGM + FG beg – FG end) = 216,000 + 36,000 – 59,000 = 193,000
7. Sales Revenue = Units x unit price = 100,000 x 8 = 800,000
8. Gross Profit = (Sales – COGS) = 800,000 – 193,000 = 607,000
9. Operating Expenses:
SE: 13,500 + 17,800 + 13,000 = 44,300
AE: 8,600 + 30,000 = 38,600
OE: 82,900
10. Operating Income = (SR – COGS – OE) = 800,000 – 193,000 – 82,900 = 524,100