Problem 2

Problem 2 – 20 Points
The following data was taken from the general ledger and other records of Martinez Manufacturing Co. at July 31, the end of the first month of operations in the current fiscal year:

Sales $50,000
Materials inventory (July 1) 15,000
Work in process inventory (July 1) 20,000
Finished goods inventory (July 1) 28,000
Materials purchased 21,000
Direct labor cost 12,500
Factory overhead (including $5,000 of indirect materials used and $2,500 of indirect labor cost)
11,500
Selling and administrative expense 8,000
Inventories at July 31:
Materials 16,000
Work in process 18,000
Finished goods 30,000


a. Prepare a statement of cost of goods manufactu