Question 2- Practice question

Canseco Company Beginning of 2019 End of 2019

Direct materials inventory $22,000 $26,000
Work-in-process inventory 21,000 20,000
Finished goods inventory 18,000 23,000
Purchases of direct materials 75,000
Direct manufacturing labour 25,000
Indirect manufacturing labour 15,000
Plant Insurance 9,000
Depreciation – plant building and 11,000
equipment
Repairs and maintenance- plant 4,000
Marketing, distribution, and 93,000
customer- service costs
General and administrative costs 29,000

2- 32 Cost of goods manufactured.

Canseco Company
Schedule of Cost of Goods Manufactured
Year Ended December 31, 2011
(in thousands)

Direct materials costs

Beginning inventory, January 1, 2011 $ 22,000
Purchases of direct materials 75,000
Cost of direct materials available for use 97,000
Ending inventory, December 31, 2011 26,000
Direct material used $71,000
Direct manufacturing labor costs
Indirect manufacturing costs
Indirect manufacturing labor 15,000
Plant insurance 9,000
Depreciation – plant building & equipment 11,000
Repairs and maintenance – plant 4,000
Total indirect manufacturing costs 39,000
Manufacturing costs incurred during 2011 135,000
Add beginning work-in-process inventory, January 1, 2011 21,000
Total manufacturing costs to account for 156,000
Deduct ending work-in-process inventory, December 31, 2011 20,000
Cost of goods manufactured (to Income Statement) $136,000

Canseco Company
Income Statement
 Year Ended December 31, 2011
(in thousands)

Revenues $300,000
Cost of goods sold:
Beginning finished goods, January 1, 2011 $18,000
Cost of goods manufactured 136,000
Cost of goods available for sale 154,000
Ending finished goods, December 31, 2011 23,000
Cost of goods sold 131,000
Gross margin 169,000
Operating costs:
Marketing, distribution, and customer- service costs 93,000
General and administrative costs 29,000
Total operating costs 122,000
Operating income $47,000