Question

Baird Manufacturing Company was started on January 1, 2018, when it acquired $75,000 cash by issuing common stock. Baird immediately purchased office furniture and manufacturing equipment costing $7,700 and $33,500, respectively. The office furniture had an eight-year useful life and a zero salvage value. The manufacturing equipment had a $3,100 salvage value and an expected useful life of four years. The company paid $12,000 for salaries of administrative personnel and $15,300 for wages to production personnel. Finally, the company paid $9,080 for raw materials that were used to make inventory. All inventory was started and completed during the year. Baird completed production on 4,100 units of product and sold 3,180 units at a price of $15 each in 2018. (Assume that all transactions are cash transactions and that product costs are computed in accordance with GAAP.) Required a. Determine the total product cost and the average cost per unit of the inventory produced in 2018. (Round "Average cost per unit" to 2 decimal places.) b. Determine the amount of cost of goods sold that would appear on the 2018 income statement. (Do not round intermediate calculations.) c. Determine the amount of the ending inventory balance that would appear on the December 31, 2018, balance sheet. (Do not round intermediate calculations.) d. Determine the amount of net income that would appear on the 2018 income statement. (Round your answer to the nearest dollar amount.) e. Determine the amount of retained earnings that would appear on the December 31, 2018, balance sheet. (Round your answer to the nearest dollar amount.) f. Determine the amount of total assets that would appear on the December 31, 2018, balance sheet. (Round your answer to the nearest dollar amount.) a. Total product cost Average cost per unit Cost of goods sold Ending inventory Net income Retained earnings Total assets e.

Answer 1

Total Product cost
Raw material	9,080
Wages to production personnel	15,300
Depreciation on manufacturing equipment	7,600
Total Product cost	31,980

1. Total Product cost = 31,980

Depreciation on manufacturing equipment = 33,500 – 3,100 / 4 = 7,600 per year

Average cost per unit = total cost / number of unit produced

                                       = 31,980 / 4,100

                                       = 7.8 per unit

2. Cost of goods sold = units sold x cost per unit

                                  = 3,180 x 7.8

                                  = 24,804

3. Ending inventory = unit in inventory x cost per unit

                                 = 920 x 7.8

                                 = 7,176

4. Net income

Total sale (3,180 x 15)	47,700
less: cost of goods sold (3,180 x 7.8)	24,804
Gross profit	22,896
less: salary of admin personnel	12,000
depreciation of office furniture	963
Net Income	9,934