Prepare an income statement and a supporting schedule

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Assignment ID: FG132912785

Question – The Howell corporation has the following account balances (in millions):

Direct materials, Jan. 1, 2020 $15

Depreciation- plant building and equipment $80

Work in process, Jan. 1 2020 $10

Plant supervisory salaries $5

Finished goods, Jan. 1 2020 $70

Miscellaneous plant overhead $35

Direct materials, Dec. 31, 2020 $20

Revenues (sales) $950

Work in process, Dec. 31, 2020 $5

Marketing, distribution, and customer-service costs $240

Finished goods, Dec. 31, 2020 $55

Plant supplies used $10

Purchase of direct materials $325

Plant utilities $30

Direct manufacturing labor $100

Indirect manufacturing labor $60

Required –

1 – Prepare an income statement and a supporting schedule of cost of goods manufactured for the year ended December 31, 2020. Explain the meaning of cost of goods manufactured.

2 – Explain why the Beginning Work in Process (BWIP) is added to the total manufacturing cost to find the cost of goods manufactured?

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