At January 1, 2012, Feldstein Manufacturing Company had a beginning balance in Work in process of $80,000 and a beginning balance in Finished goods of $20,000. During the year, Feldstein incurred manufacturing costs of $350,000.
During the year, the following transactions occurred:
Job A-12, was completed for a total cost of $120,000, and was sold for $125,000.
Job A-13, was completed for a total cost of $200,000, and was sold for $210,000.
Job A-15, was completed for a total cost $60,000, but was not sold as of year-end.
The Manufacturing overhead account had a preliminary credit balance of $12,000, and was cleared to zero at year-end.
What was the amount of gross profit reported by Feldstein at the end of the year?

Question

Quizplus · Accepted Answer

Gross profit is calculated as sales revenue minus the cost of goods sold. The sales revenue from Job A-12 and Job A-13 is $125,000 + $210,000 = $335,000. The cost of goods sold for these jobs is $120,000 + $200,000 = $320,000. Therefore, the gross profit is $335,000 - $320,000 = $15,000.

At January 1, 2012, Feldstein Manufacturing Company Had a Beginning