Question

The following events took place for Digital Vibe Manufacturing Company during March, the first month of...

The following events took place for Digital Vibe Manufacturing Company during March, the first month of its operations as a producer of digital video monitors:

a. Purchased $133,800 of materials.
b. Used $94,100 of direct materials in production.
c. Incurred $184,480 of direct labor wages.
d. Incurred $215,200 of factory overhead.
e. Transferred $425,880 of work in process to finished goods.
f. Sold goods for $664,000.
g. Sold goods with a cost of $360,000.
h. Incurred $85,460 of selling expense.
i. Incurred $71,800 of administrative expense.
Required:
Using the information given, complete the following:
a. Prepare the March income statement for Digital Vibe Manufacturing Company. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries.
b. Determine the inventory balances at the end of the first month of operations.
Amount Descriptions
Administrative expenses
Cost of goods sold
Gross profit
Net income
Revenues
Selling expenses

a. Using the information given, prepare the March income statement for Digital Vibe Manufacturing Company. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries.

Digital Vibe Manufacturing Company

Income Statement

For the Month Ended March 31

1

2

3

4

Operating expenses:

5

6

7

Total operating expenses

8

b. Using the information given, determine the inventory balances at the end of the first month of operations.

Materials
Work in process
Finished goods

Homework Answers

Answer #1
Material a/c
Purchase 133800 WIP 94100
cb 39700
WIP inventory a/c
DM 94100 FG inventory 425880
DL 184480 cb 67900
F O/h 215200
FG inventory a/c
WIP Inven 425880 COGS 360000
cb 65880
a) Income Statement :
Sales revenue 664000
Less: COGS 360000
GP 304000
Less: operating expenses:
Selling expense 85460
Admin exp 71800
Total operating expenses 157260
Net Operating Income 146740
b) Inventory balances:
Materials 39700
WIP 67900
FG Inventory 65880
total inventory 173480
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