Question

Total Manufacturing Cost, Income Statement, Unit Cost, and Selling Price Two inventors, recently organized as Innovation, Inc
Required a. Incorporate the above data into a schedule of estimated total manufacturing costs and compute the unit production
b. Prepare an estimated income statement that would provide the target amount of profit for 2016. Income Statement For the Ye
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Answer #1
Req a) Estimated Total Manufacturing Cost
Amount $ Amount $ Calculation
Direct Material:
Begin Mat. Inv. 0
Add:Purchases 553400 (12000*4 + 3000)*10 + 43400
Cost of Mat. Available 553400
Less:End Mat. Inv. 30000 3000*10
Total Mat. Used 523400
less:Indirect Mat. 43400
Direct Mat. Used 480000
Direct Labor 643200 (12000*2*22)+(12000*0.6*16)
Manufacturing Overhead:
Indirect Mat. 43400
Building rent 92920
Machinery rent 57320
Other overheads 466560
Total Manufacturing overhead 660200
Total manufacturing costs 1783400
Units produced 12000
Product cost per unit, $ 148.62
b) Estimated Income Statement:
Amount $
Sales 3212400
Less: COGS 1486200 COGS =10000*148.62 = 1486200
Gross Profit on sales 1726200 NOI = 800000*15% = 120000
Less:expenses: Let sales be x, then
Selling 963720 (1486200+(0.3x)+(0.2x)+120000=x
Administration 642480 0.5x = 1606200
Total expenses 1606200 Sales = x = 1606200/0.5 = 3212400
Net Operating Income 120000
c) Unit sale price = Sales / Units sold = 3212400 / 10000 = $321.24
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