Question

XYZ Company recorded the following information related to their inventory
accounts for 2020:

                          January 1, 2020        December 31, 2020
Direct materials               50,000                   37,000
Work in process                38,000                   41,000
Finished goods                 32,000                   34,000

The following costs were taken from XYZ Company's accounting records for
2020:

Direct materials purchased ..............................   $129,000
Depreciation, factory equipment .........................     37,000
Sales revenue ...........................................    590,000
Utilities (60% for factory; 40% for office building) ....     30,000
Sales commissions .......................................       ?
Indirect materials ......................................     29,000
Depreciation, office equipment ..........................     33,000
Rent, factory building ..................................     60,000
Net income ..............................................     10,000
Direct labor ............................................     90,000
Advertising .............................................     57,000
Production supervisor's salary ..........................     82,000

Assume that the actual overhead cost for 2020 was equal to the overhead
applied to production. Thus there was no overhead variance for 2020.

Calculate XYZ Company's sales commissions for 2020.

Answer 1

Calculate sales commission

Direct material used (50000+129000-37000)	142000
Direct labor	90000
Overhead
Depreciation factory equipment	37000
Utilities (30000*60%)	18000
Indirect material	29000
Rent	60000
Production supervisor salary	82000
Total manufacturing cost	458000
Beginning work in process	38000
Ending work in process	-41000
Cost of goods manufactured	455000
Beginning finished goods	32000
Ending finished goods	-34000
Cost of goods sold	453000

Income statement

Sales	590000
Cost of goods sold	453000
Gross profit	137000
Utilities	-12000
Depreciation	-33000
Advertising	-57000
Net income	-10000
Sales commission	25000