Reference no: EM133159155

Question - Sumber Batik is a company that produce batik in Indonesia and one of its customer is Batique Department Store. Sumber Batik located in Central Java meanwhile Batique is in Jakarta.

Sumber Batik has its own expenditure list in April 2022, starting with their beginning raw material in April 2022 is $5,000. They have $20,000 as their total budget that must be produced and they expect no ending inventory in the end. But, they can't fulfill their production budget so they still have $2,000 of raw material that should be carried to next period.

The total manufacturing cost is $ 50,000 for the month. They have Building Depreciation for their factory $2,000 and $1,000 for office. The expenditure of machine and equipment in factory  $2,000 and equipment $1,000 for office. Utilities expenditure for factory $ 1,000 and $500 for the office. Salaries for all supervisor, factory manager, and factory director are $5,000 in total. Also there is Selling Expenses $1,000 for Sumber Batik marketing and customer order operation. 

Sumber Batik has Beginning Work in process inventory $3,000 with ending work in process $8,000 along with the beginning finished good inventory $ 2,000 and ending work in process $7,000.

Sumber Batik sells their finished goods at $100 per each batik with $45 as their production cost (calculated from their Cost of Goods Manufactured (COGM)) and they sell all the quantity that produced to Batique.

Batique buys 1,000 units of Batik from Sumber Batik and sold them at price $150 per each with quantities sold are 800 units to Batique's customer. They have expenditure relate to their activity such as Building Depreciation and Equipment Depreciation with $500 for each of depreciation, Utilities Expenses $100 and selling expenses for $400.

Required - Using the datas above, calculate Sumber Batik and Batique Cost of Goods Sold and Net Operating Income for April 2022 and explain the result!