Question

In: Accounting

6. Given the following data for 2017: Administrative costs $35,000 Current liabilities 18,000 Building depreciation (80%...

6. Given the following data for 2017:

Administrative costs $35,000

Current liabilities 18,000

Building depreciation (80% for plant) 25,000

Indirect materials and supplies 4,000

Sales commission expenses 12,000

Accounts receivable 15,000

Direct materials inventory, Jan 1, 2017 15,000

Direct labor 32,000

Direct materials inventory, Dec 31, 2017 16,000

Finished goods inventory, Jan 1, 2017 8,000

Finished goods inventory, Dec 31, 2017 7,000

Materials purchases 20,000

Work in process inventory, Dec 31, 2017 10,000

Supervisory and indirect labor 12,000

Accounts payable 9,000

Property taxes (80% for plant) 10,000

Utilities and power (90% for plant) 30,000

Work in process inventory, Jan 1, 2017 12,000

Sales revenue 200,000

Stockholders’ equity 75,000

Determine:

a) The cost of goods manufactured.

b) The operating income.

c) Give an example of:

** Direct cost

** Product cost

** Period cost

** Variable cost

Solutions

Expert Solution

Cost of Goods Manufactured Schedule
Direct material
Direct materials inventory, Jan 1, 15000
ADD Materials purchases 20000
Raw Material Available 35000
Less Direct materials inventory, Dec 31 16000
Direct material Used 51000
Direct labor 32000
Overhead Cost
Indirect materials and supplies 4000
Supervisory and indirect labor 12000
Property taxes 8000
Utilities and power 27000
Building depreciation 20000
Total Overhead Cost 71000
Total Manufacturing Cost 154000
Cost of Goods Manufactured
Work in process inventory, Jan 1 12000
Total Manufacturing Cost 154000
Work in process inventory, Dec 31, 10000
Cost of Goods Manufactured 156000
Cost of Goods Manufactured 156000
Finished goods inventory, Jan 1 8000
Cost of Goods Available For Sale 164000
Less Finished goods inventory, Dec 7000
Cost of Goods sold 157000
Income Statement
Sales 200000
Cost of Goods sold 157000
Gross Profit 43000
Expenses
Building depreciation 5000
Sales commission expenses 12000
Property taxes 2000
Utilities and power 3000 22000
Operating income 21000
c) Give an example of:
Direct cost Direct material
Product cost Direct labor
Period cost Sales commission expenses
Variable cost Direct material

ekkarill92 answered 2 years ago
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