Example of transactions in balance sheets and income statement

Moriarity presents its March 2018 results

March 2018
Sales 150.000
Direct materials purchased 80.000
Direct materials used 76.000
Direct manufacturing labor costs 10.000
Indirect manufacturing labor costs 12.000
Sales salaries 14.000
Other factory expenses 22.000
Selling and administrative expenses 20.000
Initial balance finished goods inventory 7.000
Closing balance finished goods inventory 15.000
Initial balance direct materials inventory 9.000
Closing balance direct materials inventory 13.000
Initial balance work in process inventory 22.000
Closing balance work in process inventory 25.000

Requirements
1 What is the manufacturing cost incurred during the period?
2 What is the cost of goods manufactured?
3 What is the cost of goods sold?
4 What is the gross margin?
5 What is the operating profit?
PANEL A: Cost of Goods Manufactured

Moriarity
Schedule of Cost of Goods Manufactureda
For the Year Ended December 31, 2018 (in thousands)
Direct materials:

Cost of direct materials available for use

Direct materials used

Direct manufacturing labor costs

Manufacturing overhead costs:

Supplies
Heat, light, and power
Depreciation-plant building
Depreciation-plant equipment

Total manufacturing overhead costs

Manufacturing costs incurred during 2018

Total manufacturing costs to account for

Cost of goods manufactured (to Income Statement)

a
Note that this schedule can become a Schedule of Cost of Goods Manufactured and Sold simply by including the beginning and
ending finished goods inventory figures in the supporting schedule rather than in the body of the income statement.

PANEL B: Income Statement

Moriarity
Income Statement
For the Year Ended December 31, 2018 (in thousands)
Sales
Cost of goods sold:

Cost of goods sold

Gross margin (or gross profit)

Operating costs:

Total operating costs

Operating Profit:
1. What is the manufacturing cost incurred during the period?

2. What is the cost of goods manufactured?

3. What is the cost of goods sold?

4. What is the gross margin?

5. What is the operating profit?