Question

In: Accounting

GrandSlam, Inc., incurred the following costs during March: Selling expenses $ 158,400 Direct labor 284,000 Interest...

GrandSlam, Inc., incurred the following costs during March: Selling expenses $ 158,400 Direct labor 284,000 Interest expense 41,200 Manufacturing overhead, actual 130,940 Raw materials used 482,000 Administrative expenses 119,400 During the month, 19,800 units of product were manufactured and 10,900 units of product were sold. On March 1, GrandSlam, Inc., carried no inventories. On March 31, there were no inventories for raw materials or work in process. Required:

a. Calculate the cost of goods manufactured during March and the average cost per unit of product manufactured. (Round "Average cost per unit" to 2 decimal places.)

b. Calculate the cost of goods sold during March. (Round "Average cost per unit" to 2 decimal places.)

c-1. Calculate the difference between cost of goods manufactured and cost of goods sold. (Round "Average cost per unit" to 2 decimal places.)

c-2. How will this amount be reported in the financial statements? Finished goods inventory Raw materials inventory Work in progress inventory

d. Prepare a traditional (absorption) income statement for GrandSlam, Inc., for the month of June. Assume that sales for the month were $1,031,000 and the company's effective income tax rate was 30%. (Round "Average cost per unit" to 2 decimal places.)

Solutions

Expert Solution

Ans: a.

Particulars	$
Cost of goods manufactured	896,940
Average cost per unit	45.30

Explanation:

Particulars	$
Raw materials	482,000
Direct labor	284,000
Manufacturing overhead	130,940
Cost of goods manufactured	896,940

Average cost per unit = $896,940 / 19,800 units

= $45.30.

Ans: b.

Cost of goods sold

$493,770

Explanation:

Cost of goods sold = $45.30 x 10,900 units

= $493,770.

Ans: c-1.

Difference

$403,170

Explanation:

Since more units were produced ( 19,800 ) than sold ( 10,900 ), the finished goods account will increase by $403,170 ( $45.30 per unit x 8,900 units ) and cost of goods sold will be $403,170 less than cost of goods manufactured.

Ans: c-2.

Finished goods inventory

Explanation:

The difference between cost of goods manufactured and Cost of goods sold is in the Finished goods inventory account on the balance sheet.

Ans: d.

GrandSlam, Inc. Absorption income statement for the month of June
Sales	$1,031,000
Less: Cost of goods sold	( 493,770)
Gross profit	$537,230
Less: Selling and administrative expenses ( $158,400 + $119,400)	( 277,800)
Operating income	$259,430
Less: Interest expense	( 41,200)
Income before taxes	$218,230
Income tax expense	( 65,469)
Net income	$152,761

ekkarill92 answered 2 weeks ago

Next > < Previous

Related Solutions

GrandSlam, Inc., incurred the following costs during March: Selling expenses $ 159,900 Direct labor 305,000 Interest...

GrandSlam, Inc., incurred the following costs during March: Selling expenses $ 159,900 Direct labor 305,000 Interest expense 40,400 Manufacturing overhead, actual 111,000 Raw materials used 477,000 Administrative expenses 115,900 During the month, 18,800 units of product were manufactured and 11,800 units of product were sold. On March 1, GrandSlam, Inc., carried no inventories. On March 31, there were no inventories for raw materials or work in process. Required: Calculate the cost of goods manufactured during March and the average cost...

Partridge, Inc. incurred the following costs during March: Raw materials purchased $ 46,800 Direct labor (9,200...

Partridge, Inc. incurred the following costs during March: Raw materials purchased $ 46,800 Direct labor (9,200 hours) 156,400 Manufacturing overhead (actual) 83,000 Selling expenses 47,400 Administrative expenses 32,600 Interest expense 14,800 Manufacturing overhead is applied on the basis of $8.50 per direct labor hour. Assume that overapplied or underapplied overhead is transferred to cost of goods sold only at the end of the year. During the month, 3,500 units of product were manufactured and 3,400 units of product were sold....

Maryville, Inc., incurred the following costs during August: Raw materials used $ 34,700 Direct labor 51,600...

Maryville, Inc., incurred the following costs during August: Raw materials used $ 34,700 Direct labor 51,600 Manufacturing overhead, actual 48,100 Selling expenses 29,120 Administrative expenses 15,580 Interest expense 10,000 During the month, 5,600 units of product were manufactured and 3,900 units of product were sold. On August 1, Maryville, Inc., carried no inventories. On August 31, there were no inventories other than finished goods. Required: a. Calculate the cost of goods manufactured during August and the average cost per unit...

Maryville, Inc., incurred the following costs during August: Raw materials used $ 30,400 Direct labor 50,500...

Maryville, Inc., incurred the following costs during August: Raw materials used $ 30,400 Direct labor 50,500 Manufacturing overhead, actual 40,100 Selling expenses 25,130 Administrative expenses 20,670 Interest expense 10,000 During the month, 5,500 units of product were manufactured and 4,000 units of product were sold. On August 1, Maryville, Inc., carried no inventories. On August 31, there were no inventories other than finished goods. Required: a. Calculate the cost of goods manufactured during August and the average cost per unit...

Mohkam’s incurred the following costs during 2019. Direct material used .......................................................................................... Rs.87,000,000 Direct labor .................................................................

Mohkam’s incurred the following costs during 2019. Direct material used .......................................................................................... Rs.87,000,000 Direct labor ....................................................................................................... 162,000,000 Manufacturing overhead applied ........................................................................ 90,000,000 During 20x2, products costing $600,000 were finished, and products costing $66,000,000 were sold on account for $97,500,000. There were no purchases of raw material during the year. The beginning balances in the firm’s inventory accounts are as follows: Raw material .................................................................................................... $113,500,000 Work in process ................................................................................................ 9,000,000 Finished goods ................................................................................................. 15,000,000 Required: 1. Prepare T-accounts to show the flow...

Ash Company incurred direct materials costs of $1,600,000 during the year. Direct Labor costs were $600,000....

Ash Company incurred direct materials costs of $1,600,000 during the year. Direct Labor costs were $600,000. Manufacturing overhead was applied at the rate of 70% of direct labor costs. What were Ash Company’s total manufacturing costs for the year? Superior Painting Company has the following production data for January: · Beginning work in process, 0 units · Units transferred out, 35,000 · Units in ending work in process, 10,000, which are 45% complete for conversion costs Materials are added only...

The actual selling expenses incurred in March 2020 by Fallon Company are as follows. Variable Expenses...

The actual selling expenses incurred in March 2020 by Fallon Company are as follows. Variable Expenses Fixed Expenses Sales commissions $11,178 Sales salaries $35,100 Advertising 12,156 Depreciation 6,500 Travel 6,912 Insurance 1,900 Delivery 3,576 (a) Prepare a flexible budget performance report for March, assuming that March sales were $172,800. Variable costs and their percentage relationship to sales are sales commissions 6%, advertising 7%, traveling 4%, and delivery 2%. Fixed selling expenses will consist of sales salaries $35,100, Depreciation on delivery...

The actual selling expenses incurred in March 2017 by Fallon Company are as follows. Variable Expenses...

The actual selling expenses incurred in March 2017 by Fallon Company are as follows. Variable Expenses Fixed Expenses Sales commissions $10,978 Sales salaries $35,100 Advertising 11,911 Depreciation 7,300 Travel 8,415 Insurance 1,900 Delivery 3,446 (a) Prepare a flexible budget performance report for March, assuming that March sales were $168,300. Variable costs and their percentage relationship to sales are sales commissions 6%, advertising 7%, traveling 5%, and delivery 2%. Fixed selling expenses will consist of sales salaries $35,100, Depreciation on delivery...

Buck & Company incurred the following costs during August: Raw materials purchased $ 43,270 Direct labor...

Buck & Company incurred the following costs during August: Raw materials purchased $ 43,270 Direct labor ($12.3 per hour) 54,366 Manufacturing overhead (actual) 90,140 Selling expenses 31,450 Administrative expenses 14,150 Interest expense 6,274 Manufacturing overhead is applied on the basis of $19 per direct labor hour. Assume that overapplied or underapplied overhead is transferred to cost of goods sold only at the end of the year. During the month, 4,040 units of product were manufactured and 4,500 units of product...

Reimel Furniture Company, Inc. incurred the following costs during 20x2. Direct material used $ 173,000 Direct...

Reimel Furniture Company, Inc. incurred the following costs during 20x2. Direct material used $ 173,000 Direct labor 321,000 Manufacturing overhead 160,000 During 20x2, products costing $121,000 were finished, and products costing $132,000 were sold on account for $193,000. There were no purchases of raw material during the year. The beginning balances in the firm’s inventory accounts are as follows: Raw material $ 227,000 Work in process 16,000 Finished goods 30,000 Prepare a partial balance sheet and a partial income statement...

Subjects