Norton Industries, a manufacturer of cable for the heavy construction industry, closes its books and prepares financial statements at the end of each month. The statement of cost of goods sold for April follows: NORTON INDUSTRIES
Statement of Cost of Goods Sold
For the Month Ended April 30
($000 omitted)
Finished goods inventory, March 31 $ 50
Cost of goods manufactured 790
Cost of goods available for sale $ 840
Less: Finished goods inventory, April 30 247
Cost of goods sold $ 593
Additional Information
1. Of the utilities, 80% relates to manufacturing the cable; the remaining 20% relates to the sales and administrative functions. All rent is for the office building.
2. Property taxes are assessed on the manufacturing plant.
3. Of the insurance, 60% is related to manufacturing the cable; the remaining 40% is related to the sales and administrative functions.
4. Depreciation expense includes the following:
Manufacturing plant$20,000
Manufacturing equipment30,000
Office equipment 4,000
$54,000
The company manufactured 7,825 tons of cable during May.
The inventory balances at May 31, follow:
Materials Inventory $23,000
Work-in-Process Inventory $220,000
Finished Goods Inventory $175,000