Manufacturing cost statement

& income statement

 Manufacturing
Cost statement

Direct costs

Direct material ×

Direct wages ×

Direct ex ×

‫ــــــــــــــــــــــــــــ‬

Total direct costs ×××

 ‫‪In direct costs‬‬
‫‪In direct material‬‬ ‫×‬
‫‪In direct wages‬‬ ‫×‬
‫‪In direct ex‬‬ ‫×‬

‫ـــــــــــــــــــــ‬

‫‪Total in direct cost‬‬ ‫×××‬

‫ــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــ‬
‫‪Total Manufacturing costs‬‬ ‫××××××‬
‫‪( + ) Beginning inventory in process‬‬ ‫×‬
‫‪( - ) Ending inventory in process‬‬ ‫×‬
‫ـــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــ‬
‫ـ‬
‫‪Cost of goods manufactured‬‬ ‫××××××‬
‫ـــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــ‬
‫‪ ( + ) Beginning inventory‬ـ‬ ‫×‬
‫‪( - ) Ending inventory‬‬ ‫×‬
‫ـــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــ‬
‫‪Cost of goods sold‬‬ ‫××××××‬
 ‫‪Income statement‬‬
‫‪Sales‬‬ ‫×××‬
‫)‪(-‬‬
‫‪Cost of good sold‬‬ ‫×‬
‫ـــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــ‬
‫ـ‬
‫‪Gross profit‬‬ ‫×××‬
‫)‪(-‬‬
‫‪Marketing ex‬‬ ‫××‬
‫‪Managerial ex‬‬ ‫××‬
‫ـــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــ‬
‫ـ‬
‫‪Net income‬‬ ‫×××‬
• Ex:-
The following date related to ELRahmun Company :-
5000 direct material -1000 direct labor –
7000 indirect material – 8000 indirect labor –
5000 indirect expenses -2000 beginning work in
process – 3000 ending work in process –
1000 beginning inventory – 6000 ending inventory –
100000 sales – 1000 marketing expenses –
9000 managerial expenses .
• Required:-
1- prepare the Manufacturing cost statement.
2- prepare Income statement.
• Answer :-
1-monufacturing cost statement :-
* Direct costs
5000 D.M
1000 D.L
6000 Total D . C
* Indirect costs
7000 I.D.M
8000 I.D.L
5000 I.D.E
20000 Total I . D . C
26000 TOTAL M . C
2000 +B.W.P
( 3000 ) (-)E.W.P
25000 Cost of manufacturing good
1000 +B.V
( 6000 ) (-)E.V
20000 Cost of good sold
• Income statement :-

Sales
100000 ( -)
( 20000 ) Cost of good sold
80000 Gross profit
( - ) Expenses
( 1000 ) Marketing
( 9000 ) Managerial
70000 Net income