Question

Question 1

​Hendrix & Franks Co. had the following beginning and ending inventory balances for the current year ended December 31:

​	January 1	December 31
Materials	$11,000	$ 8,800
Work in Process	19,800	18,700
Finished Goods	23,100	18,150

​

In addition, direct labor costs of $33,000 were incurred, manufacturing overhead equaled $46,200, materials purchased were $29,700, and selling and administrative costs were $24,200. Hendrix & Franks Co. sold 27,500 units of product during the year at a sales price of $5.25 per unit. What was the operating income (loss) for the year?

Options:

$18,500

$125,000

$3,025

$2,000

Question 2

Rocha & Noel Inc. had cost of goods sold of $123,200 for the current year ended December 31. The finished goods inventory on January 1 was $30,800, and the finished goods inventory on December 31 was $18,700. What was the amount of cost of goods manufactured for the year?

Options:

$129,000

$111,100

$67,000

$113,000

Answer 1

1.

Schedule of Cost of Goods Manufactured
Beginning raw material inventory	11,000
Purchase of raw material	29,700
Ending raw material inventory	-8,800
Raw material used	31,900
Direct labor	33,000
Manufacturing Overheads	46,200
Total manufacturing cost	111,100
Beginning work in process inventory	19,800
Ending work in process inventory	-18700
Cost of goods manufactured	112,200
Finished goods inventory, beginning	23,100
Cost of goods available for sale	135,300
Finished goods inventory, Ending	-18,150
Cost of goods sold	117,150

Income Statement
Sales ( 27,500 x 5.25)	144,375
Cost of goods sold	-1171,50
Gross Profit	138,325
Selling and administrative expense	-24,200
Operating income	$3,025

The operating income (loss) for the year $3,025

Third option is correct option.

Cost of good sold = $123,200

Finished goods inventory beginning = $30,800

Finished goods inventory ending = $30,800

Cost of goods sold = Finished goods inventory beginning + Cost of goods manufactured - Finished goods inventory, ending

123,200 = 30,800+Cost of goods manufactured - 18,700

Cost of goods manufactured = $111,100

Second option is correct option.