EX 19-13Parts A and B Excel• Purchased $320,000 of materials• Used $275,000 of direct materials in productionIncurred $236,000 of direct labor wages• Applied factory overhead at a rate of 75% of direct labor costTransferred $652,000 of work in process to finished goods• Sold goods with a cost of $630,000• Sold goods for $1,120,000• Incurred $252,800 of selling expenses• Incurred $100,000 of administrative expensesa. Prepare the July income statement for Focault. Assume that Focault uses the perpetualinventory method.Answerb. Determine the inventory balances at the end of the first month of operations. 1b.RevenuesGross profitSelling and administrative expenses:Total selling and administrative expensesIncome from operationsMaterials inventory:FOCAULT INC.Income StatementFor the Month Ended July 31Purchased materialsLess: Materials used in productionMaterials inventoryWork in process inventory:Materials used in productionDirect laborFactory overheadAdditions to work in processLess: Transferred to finished goodsWork in process inventory, July 31Finished goods inventory:Transferred to finished goodsLess: Cost of goods soldFinished goods inventory, July 31

Total production cost of job is the cost incurred in the factory for producing the good which…

Used $275,000 of direct materials in production • Incurred $236,000 of direct labor wages Applied factory overhead at a rate of 75% of direct labor cost Transferred $652,000 of work in process to finished goods • Sold goods with a cost of $630,000 • Sold goods for $1,120,000 → Incurred $252,800 of selling expenses Incurred $100,000 of administrative expenses a. Prepare the July income statement for Focault. Assume that Focault uses the perpetual inventory method. Answer b. Determine the inventory balances at the end of the first month of operations.

Used $275,000 of direct materials in production • Incurred $236,000 of direct labor wages Applied factory overhead at a rate of 75% of direct labor cost Transferred $652,000 of work in process to finished goods • Sold goods with a cost of $630,000 • Sold goods for $1,120,000 → Incurred $252,800 of selling expenses Incurred $100,000 of administrative expenses a. Prepare the July income statement for Focault. Assume that Focault uses the perpetual inventory method. Answer b. Determine the inventory balances at the end of the first month of operations.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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