Question

[The following information applies to the questions displayed below.]

The following selected information was extracted from the 20x1 accounting records of Lone Oak Products:

Raw material purchases	$	175,000
Direct labor		254,000
Indirect labor		109,000
Selling and administrative salaries		133,000
Building depreciation*		80,000
Other selling and administrative expenses		195,000
Other factory costs		343,000
Sales revenue ($130 per unit)		1,495,000

*Seventy-five percent of the company's building was devoted to production activities; the remaining 25 percent was used for selling and administrative functions.

Inventory data:

	January 1			December 31
Raw material	$	16,000		$	18,200
Work in process		35,900			62,100
Finished goods*		113,100			97,900

*The January 1 and December 31 finished-goods inventory consisted of 1,350 units and 1,190 units, respectively.

1. Calculate Lone Oak’s manufacturing overhead for the year.

2. Calculate Lone Oak’s cost of goods manufactured.

3. Compute the company’s cost of goods sold.

4. Determine net income for 20x1, assuming a 30% income tax rate.

5. Determine the number of completed units manufactured during the year.

Answer 1

manu facturng overhead 109000 indirect labour 343000 oTher factory COST Building Depreual 60000 ooco Y 5דf $ 512000 Beg innig makesial maleral porchajeol 16000 175000 (8200) Ending invendo ry 172800 Direct malenal used Direit la bouo cost Overhead applued @ 254000 518000 manufacturing cest 938800 Beginning wIP 35900 E) Ending wip (62100) Cost of g0odj marofactused 912600 FINshed goodj Beginrung 113100 (TM00) E-) Ending 92-7800 Cost of goody sold

927800 Cost of 9cos sold 20000 Depreiahon Boooox 25%. 1 33000 Selleneg ? admun sala riej OTher selling 1 Adm Ex peno 195000 1275800 Cost of salel @ Salej 1495000 profit -(a 219 200 65760) E) TaI @ 30%. $ 153440 Net income sale, 1495co0/130 GA PInushed gooa, Ending 1500 1190 (350) O Beginnig aood inven tory 11340 no of goody manufachreod Total