Question

The following events took place for Digital Vibe Manufacturing Company during January, the first month of its operations as a producer of digital video monitors: Purchased $40,000 of materials Used $30,800 of direct materials in production. Incurred $46,000 of direct labor wages. Incurred $64,800 of factory overhead. Transferred $107,600 of work in process to finished goods. Sold goods for $192,400. Sold goods with a cost of $85,600. Incurred $49,200 of selling expenses. Incurred $21,600 of administrative expense. Using the information given, complete the following: a. Prepare the January income statement for Digital Vibe Manufacturing Company.

Answer 1

Digital Vibe Manufacturing Company
Income Statement
For the Month Ended January 31
Sales		$                         192,400
Cost of Goods Sold		(85,600)
Gross Profit		$                         106,800
Operating Expenses:
Selling Expense	$   (49,200)
Administrative Expense	(21,600)
Total Operating Expense		(70,800)
Net Income		$                           36,000