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30 June, 12:51

Zoe Corporation has the following information for the month of March:Purchases $ 92,000Materials inventory, March 1 6,000Materials inventory, March 31 8,000Direct labor 25,000Factory overhead 37,000Work in process, March 1 22,000Work in process, March 31 23,500Finished goods inventory, March 1 21,000Finished goods inventory, March 31 30,000Sales 257,000Sales and administrative expenses 79,000 Prepare (a) a schedule of cost of goods manufactured and (b) an income statement for the month.

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  1. 30 June, 15:35
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    Instructions are listed below

    Explanation:

    Giving the following information:

    Materials inventory, March 1 6,000

    Materials inventory, March 31 8,000

    Work in process, March 1 22,000

    Work in process, March 31 23,500

    Finished goods inventory, March 1 21,000

    Finished goods inventory, March 31 30,000

    Direct labor 25,000

    Factory overhead 37,000

    Purchases $ 92,000

    Sales 257,000

    Sales and administrative expenses 79,000

    A) Cost of goods manufactured:

    beginning WIP = 22000

    Direct materials = (6000 + 92000 - 8000) = 90,000

    Direct labor = 25000

    Allocated manufacturing overhead = 37000

    Ending WIP = 23500 (-)

    Total = 150,500

    B) First, we need to calculate the cost of goods sold:

    COGS = beginning finished inventory + cost of goods manufactured - ending finished inventory = 21000 + 150500 - 30000 = $141,500

    Income statement:

    Sales = 257,000

    COGS = 141500

    Gross profit = 115,500

    Sales and administrative expenses 79,000

    Net operating profit = $36,500
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