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.

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