In: Accounting
Vernon Manufacturing Company was started on January 1, year 1,
when it acquired $77,000 cash by issuing common stock. Vernon
immediately purchased office furniture and manufacturing equipment
costing $8,400 and $32,800, respectively. The office furniture had
an eight-year useful life and a zero salvage value. The
manufacturing equipment had a $3,200 salvage value and an expected
useful life of four years. The company paid $11,700 for salaries of
administrative personnel and $15,500 for wages to production
personnel. Finally, the company paid $14,360 for raw materials that
were used to make inventory. All inventory was started and
completed during the year. Vernon completed production on 4,600
units of product and sold 3,610 units at a price of $15 each in
year 1. (Assume that all transactions are cash transactions and
that product costs are computed in accordance with GAAP.)
Required
Determine the total product cost and the average cost per unit of the inventory produced in year 1. (Round "Average cost per unit" to 2 decimal places.)
Determine the amount of cost of goods sold that would appear on the year 1 income statement. (Do not round intermediate calculations.)
Determine the amount of the ending inventory balance that would appear on the December 31, year 1, balance sheet. (Do not round intermediate calculations.)
Determine the amount of net income that would appear on the year 1 income statement. (Round your final answer value to the nearest whole dollar.)
Determine the amount of retained earnings that would appear on the December 31, year 1, balance sheet. (Round your final answer value to the nearest whole dollar.)
Determine the amount of total assets that would appear on the December 31, year 1, balance sheet. (Round your final answer value to the nearest whole dollar.)
Thank you
Total product cost = Direct materials + Direct labor + Manufacturing overhead
There is only depreciation on manufacturing equipment as overhead.
Cost per unit = Total product cost / Number of unts produced