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Given the following selected account balances of Shanta Company.
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Question & Answer: Given the following selected account balances of Shanta Company……
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| Sales | $ | 1,250,000 |
| Raw materials inventory, Dec. 31, 2012 | 37,000 | |
| Goods in process inventory, Dec. 31, 2012 | 53,900 | |
| Finished goods inventory, Dec. 31, 2012 | 62,750 | |
| Raw materials purchases | 175,600 | |
| Direct labor | 225,000 | |
| Factory computer supplies used | 17,840 | |
| Indirect labor | 47,000 | |
| Repairs—Factory equipment | 5,250 | |
| Rent cost of factory building | 57,000 | |
| Advertising expense | 94,000 | |
| General and administrative expenses | 129,300 | |
| Raw materials inventory, Dec. 31, 2013 | 42,700 | |
| Goods in process inventory, Dec. 31, 2013 | 41,500 | |
| Finished goods inventory, Dec. 31, 2013 | 67,300 | |
| Prepare its manufacturing statement for the year ended on December 31, 2013. |
Expert Answer
SHANTA COMPANY
Manufacturing Statement
For Year Ended December 31, 2013
| Direct materials: | ||
| Raw materials inventory, Dec. 31, 2012 | $37,000 | |
| Add: Raw materials purchases | $175,600 | |
| Raw materials available for use | $212,600 | |
| Less: Raw materials inventory, Dec. 31, 2013 | $42,700 | |
| Direct materials used | $169,900 | |
| Direct labor | $225,000 | |
| Factory overhead: | ||
| Factory computer supplies used | $17,840 | |
| Indirect labor | $47,000 | |
| Repairs—Factory equipment | $5,250 | |
| Rent cost of factory building | $57,000 | |
| Total factory overhead costs | $127,090 | |
| Total manufacturing costs | $521,990 | |
| Add: Goods in process inventory, Dec. 31, 2012 | $53,900 | |
| Total cost of goods in process | $575,890 | |
| Less: Goods in process inventory, Dec. 31, 2013 | $41,500 | |
| Cost of goods manufactured | $534,390 |
