Question

Deuce Company manufactures a small engine. During Year3, Deuce completed 2000 engines. Deuce incurred the following costs

$40000 for the cost of materials for the engines
$20000 for the cost of labor in the factory
$54000 for the depreciation on administrative equipment
$140000 for depreciation on the manufacturing equipment

Deuce had no inventory on hand at the beginning of Year3. The company sold 800 engines during Year3.

Round your final answers to the nearest dollar, if needed. Do not include any commas or other punctuation in your answer.

Do not enter expenses as a negative number.

What will Deuce report as Depreciation expense on the Year3 income statement?  

What will Deuce report as inventory on the balance sheet as of the end of Year3?

Answer 1

Cost of material	$                     40,000
Cost of labor	$                     20,000
Depreciation expense on factory equipment( Manu. Overhead)	$                   140,000
Total Cost	$                   200,000
Divide by No of units produced	2,000
Cost per unit	$                     100.00
What will Deuce report as Depreciation expense on the Year3 income statement?
Deuce will report $54,000 as depreciation expense
What will Deuce report as inventory on the balance sheet as of the end of Year3?
Inventory
NO of units	Amount
1200	$                   120,000
	(1200 units x $100)