Financial Statements Analysis: COGS & Manufacturing Costs for Norton Industries & 3 Others, Study notes of Construction

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Sales CGS GM Period Profit

COST FLOWS IN A MANUFACTURING FIRM

Income Statement

1

COST OF GOODS MANUFACTURED, INCOME STATEMENT Norton Industries, a manufacturer of cable for the heavy construction industry, closes its books and prepares financial statements at the end of each month. The statement of cost of goods sold for April 2000 follows:

Norton Industries Statement of Cost of Goods Sold For the Month Ended April 30, 2000 ($000 omitted)

Inventory of finished goods, March 31 $ 50 Cost of goods manufactured 790 Cost of goods available for sale $ Less inventory of finished goods, April 30 247 Cost of goods sold $

Additional Information

• Of the utilities, 80 percent relates to manufacturing the cable; the remaining 20 percent relates to the sales and administrative functions.
• All rent is for the office building.
• Property taxes are assessed on the manufacturing plant.
• Of the insurance, 60 percent is related to manufacturing the cable; the remaining 40 percent is related to the sales and administrative functions.
• Depreciation expense includes the following: Manufacturing plant $20, Manufacturing equipment 30, Office equipment 4, $54,
• The company manufactured 7,825 tons of cable during May 2000.
• The inventory balances at May 31, 2000, follow: Direct materials inventory $ 23, Work-in-process inventory 220, Finished goods inventory 175,

COST OF GOODS MANUFACTURED, INCOME STATEMENT

Consider the following information for American Marine Craft, Inc. for the year ended December 31, 2004:

Depreciation expense-Administrative office $ 32, Depreciation expense-Plant and equipment 65, Direct labor-Wages 435, Direct materials inventory, Dec. 31, 2004 18, Direct materials inventory, Jan. 1, 2004 18, Direct materials purchases 144, Finished goods inventory, Dec. 31, 2004 28, Finished goods inventory, Jan. 1, 2004 15, Heat, light, & power-Plant 36, Indirect labor 25, Property taxes-Plant 34, Sales representatives' salaries 145, Sales revenue 1,500, Supervisor's salary 56, Supplies-Administrative office 6, Supplies-Plant 23, Work-in-Process inventory, Dec. 31, 2004 12, Work-in-Process inventory, Jan. 1, 2004 23,

Required: Prepare a statement of cost of goods manufactured and an income statement for American Marine Craft for the year ended December 31, 2004.

The following data pertain to Spartan Products Company:

Required: Prepare a statement of cost of goods manufactured and an income