Question

Campus Fashion Inc. Income Statement at December 31, 2018 Revenues: Sales revenue .. Dividend revenue. Sales commission payable. Allowance for uncollectible accounts. Royalty revenue... Gain on sale of office equipment ..... Total revenues.... Less: Cost of goods manufactured... Gross profit..... Operating expenses: Selling ....... General and administrative .. Restructuring costs... Short-term investments.. Dividend paid.... Interest expense..... Total operating expenses .... Net loss..... $300,000 1.800 1.000 2,000 500 1,500 306,800 (243.100) 63,700 30,000 34,000 6,000 5,400 600 2,000 78,000 S(14.300) Campus Fashion Inc. Schedule of Cost of Goods Manufactured at December 31, 2018 Direct materials purchased .. $100,000 Direct manufacturing labor. 43,000 Manufacturing overhead: Indirect materials...... $3,000 Factory bonus payable .. (2,500) Indirect manufacturing labor costs 13,000 Factory equipment. 48,000 Research and development expense.. 6,000 Factory rent 18,000 Prepaid factory insurance .. 600 Repair of delivery truck. 400 Factory insurance 2,000 Other indirect manufacturing costs. 4,600 Factory utilities ....... 7,000 Total manufacturing overhead.... 100,100 Cost of goods manufactured.... $243.100

Answer 1

Answer 1.

Schedule of Cost of Goods Manufactured for the year ended Dec.31,2018

	Amount in Dollar	Amount in Dollar
Direct Material Used:
Beg. Material	7,000
Direct Material Purchased	100,000
Raw Material Available	107,000
Less: Ending Raw Material	6,000
Less: Indirect Material	3,000	98,000
Direct Manufacturing Labor		43,000
Manufacturing Overhead
Indirect Material	3,000
Indirect Labor	13,000
Factory rent	18,000
factory insurance	2,000
Factory utilities	7,000
other factory cost	4,600
Equipment Depreciation *	9,200
Total Manufacturing Overhead		56,800
Total Manufacturing Costs		197,800
Add: Beg. Work in process		10,000
Less: End. Work in process		8,000
Cost of goods Manufactured		199,800

* Equipment depreciation = (48,000 - 2,000) $\times$ 40% $\times$ 1/2 = 9,200

Income Statement for the year ended Dec. 31, 2018

Sales Revenue		3,00,000
Less: Cost of Goods Sold
Cost of Goods Manufacture	199,800
Add: Beg. Finished goods	28,000
Less: End. Finished goods	25,000	202,800
Gross Income		97,200
Less: Operating expense
Selling	30,000
Gen. & Adm. expense	34,000	64,000
Operating Income		33,200
Other Income/Expenses:
Dividend Revenue	1,800
Royalty Revenue	500
Gain on Sale of equipment	1,500
Dividend Paid	(600)
Interest Expense	(2,000)
Restructuring cost	(6,000)	(4,800)
Profit Before Tax		28,400
Less: Tax @ 21%		5,992
Profit after Tax		22,408

3. Cost of producing one Unit, if company produced 50,000 unit in 2018.

Total Cost of goods Manufactured = 1,99,800

Total Number of units manufactured = 50,000 units

Cost of producing one Unit = $199,800 $\div$ 50,000 units = $3.996 or $ 4 per unit