Question

Furtz Company has accumulated the following budget data for the year 2020. Sales: 31,330 units, unit selling price $88 Cost of one unit of finished goods: direct materials 1 pound at $5 per pound, direct labor 3 hours at $22 per hour, and manufacturing overhead $7 per direct labor hour. Inventores (raw materials only beginning, 10,220 pounds; ending, 15,410 pounds, Selling and administrative expenses $170,000; interest expense: $30,000. Income taxes: 30% of income before income taxes.

Prepare a budgeted income statement for fultz company

Answer 1

FULTZ COMPANY
Computation of Cost of goods sold
For the Year Ending December 31, 2020
Cost of one unit of finished goods:
Direct materials	5	=1*5
Direct labor	36	=3*12
Manufacturing Overhead	21	=3*7
Total	62
Cost of goods sold	1942460	=31330*62
2
FULTZ COMPANY
Budgeted Income Statement
For the Year Ending December 31, 2020
Sales	2757040	=31330*88
Cost of Goods Sold	1942460
Gross Profit	814580
Selling and Administrative Expenses	170000
Income from Operations	644580
Interest Expense	30000
Income before Income Taxes	614580
Income Tax Expense	184374
Net Income / (Loss)	430206