Question

Required information [The following information applies to the questions displayed below.] The following data refer to Twisto Pretzel Company for the year 20x1. Work-in-process inventory, 12/31/x0 Selling and administrative salaries Insurance on factory and equipment Work-in-process inventory, 12/31/x1 Finished-goods inventory, 12/31/x0 Cash balance, 12/31/x1 Indirect material used Depreciation on factory equipment Raw-material inventory, 12/31/XO Property taxes on factory Finished-goods inventory, 12/31/x1 Purchases of raw material in 20x1 Utilities for factory Utilities for sales and administrative offices Other selling and administrative expenses Indirect-labor cost incurred Depreciation on factory building Depreciation on cars used by sales personnel Direct-labor cost incurred Raw-material inventory, 12/31/x1 Accounts receivable, 12/31/x1 Rental for warehouse space to store raw material Rental of space for company president's office Applied manufacturing overhead Sales revenue Income tax expense $ 8,100 13,600 3,600 8,300 14,000 8,000 4,600 2,100 10,100 2,400 15,300 39,200 6,000 2,400 3,800 29,000 3,800 1,200 79,000 11,000 4,100 3,000 1,600 58,000 205,800 5,100

Answer 1

Solution:

TWISTO PRETZEL COMPANY
Schedule of cost of goods manufactured
For the year ended december31 ,20x1
Direct material
Raw material inventory , 31/12/20x0	10,100
Add: Purchases of raw materials	39,200
Raw mateials available for use	49,300
Deduct raw material inventory, 31/12/20x1	11,000
Raw materials used		38,300
Direct labour		79,000
Manufacturing overhead
Indirect materials	4,600
Indirect labour	29,000
Depreciation on factory building	3,800
Depreciation on factory equipment	2,100
Utilities	6,000
Property taxes	2,400
Insurance	3,600
Rental of warehouse space	3,000
Total actual manufacturing overhead	54,500
Add: Overapplied overhead	3,500
Overhead applied to work in process		58,000
Total manufacturing costs		1,75,300
Add: Work in process inventory, 31/12/00		8,100
Subtotal		1,83,400
Less: Work in process inventory 31/12/01		8,300
Cost of goods manufactured		1,75,100

TWISTO PRETZEL COMPANY
Schedule of cost of goods sold
For the year ended december31 ,20x1
Finished goods inventory 31/12/x0	14,000
Add: cost of goods manufactured	1,75,100
Cost of goods available for sale	1,89,100
Deduct: Finished goods inventory, 31/12/01	15,300
Cost of goods sold	1,73,800
Deduct: Overapplied overhead	3,500
Adjusted Cost of goods sold	1,70,300

TWISTO PRETZEL COMPANY
Income statement
For the year ended december31 ,20x1
Sales revenue		2,05,800
Less: cost of goods sold		1,70,300
Gross margin		35,500
Selling and administrative expenses
Salaries	13,600
Utilities	2,400
Depreciation	1,200
Rental of office space	1,600
Other expenses	3,800
Total		22,600
Income before taxes		12,900
Income tax expenses		5,100
Net Income		7,800