Case Scenario:
Andragon Manufacturing, a small private company, has recently hired you as their accounting department supervisor. You have been told that your role will also include some of the day-to-day accounting. John Edwards, the company's CEO and principal shareholder, has told you during your hiring interview that his strategy is to expand Andragon's operations and that he is seriously thinking about taking the company public in the near future. As such, he has instructed the company's human resources manager to hire several management trainees to expand Andragon's management force.
Problem:
As a result of poor system maintenance and data backup procedures prior to your arrival at ANDRAGON Manufacturing, a computer virus had damaged several important files within the company's accounting files. As a result, the company's statement of cost of goods manufactured (COGM) needs to be re-created based on the following end-of-the-year information attached
1. Using a spreadsheet program like Excel, re-construct the company's statement of cost of goods manufactured (COGM).
2. As part of your agenda for the day, you are to meet with the CEO of the company to discuss the company's net income. Once the COGM is derived, create a simple income statement to derive the company's operating income/loss.
Sales and Administrative/Operating Expenses $679,000
Manufacturing O.H 459,200
Beginning materials inventory 87,900
Ending materials inventory 56,120
Raw Material Purchases 120,000
Beginning Work-in-Process Inventory 95,400
Ending Work-in-Process Inventory 62,300
Beginning Finished Goods Inventory 45,120
Ending Finished Goods Inventory 134,900
Direct Labor expenses 347,678
Sales 2,556,120