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Click here to get McDermott Manufacturing in Excel (shown below).  Note: after downloading Excel Interactive McDermott Manufacturing file, you can put your own numbers in the white boxes and see the calculations of all figures in yellow boxes--a good way to practice for the first quiz.

	Flow  of Costs Through Factory and Financial Statement--Richard E. McDermott, Ph.D.
	Assumptions
	Problem assumes overhead applied = actual overhead.														Cost of Goods Manufactured and Sold
	All materials go into factory (no indirect materials)														Beginning inventory raw materials			$                 12,000.00
	Instructions:														Purchases			$                 30,000.00
	Enter  new data in boxes to get a new Cost of Goods Manufactured and Sold and Income Statement														Raw materials available for sale			$                 42,000.00
	Don't enter data in yellow boxes, values here are calcuated from values														Less ending inventory raw  materials			$              (27,000.00)
															Direct materials used			$                 15,000.00
	Income Statement														Direct labor			$                 18,000.00
	Sales	$      130,000.00													Overhead applied			$                   9,000.00
	COGS	$      (65,000.00)													Total manufacturing costs			$                 42,000.00
	Gross Margin	$        65,000.00													Beginning Inventory work in process			$                 50,000.00
	Admin Exp	$      (13,500.00)													Total costs in WIP			$                 92,000.00
	Mktg Exp	$        (6,000.00)													Less ending inventory WIP			$              (32,000.00)
	Income from Op	$        45,500.00													Cost of goods manufactured			$                 60,000.00
					Expense	$       13,500.00				Expense	$         9,500.00				Beginning inventory fin goods			$                 17,000.00
															Finished goods available for sale			$                 77,000.00
															Ending inventory finished goods			$              (12,000.00)
									$        42,000.00						Cost of Goods sold			$                 65,000.00
					Expense	$         6,000.00
												$       92,000.00						Sales = 2.0 x COGS
																		$              130,000.00
																		Cost of  Goods Sold
								Direct		Begin Inventory WIP	$       50,000.00							$                 65,000.00
								Materials		Ending Inventory WIP	$       32,000.00
					Begin Inv Raw Mat	$       12,000.00		Put into		Direct Labor	$       18,000.00				Begin Invent Fin Goods	$           17,000.00
		Purchased			End Inv Raw Mat	$       27,000.00		Production		Overhead Applied	$         9,000.00				End Inventory Fin goods	$           12,000.00
		$        30,000.00			Raw Mat Purchased	$       30,000.00		$     15,000.00		Direct Materials	$       15,000.00				Cost of Goods Manufactured	$           60,000.00