Question

Exercise 9-13 (Video) Fultz Company has accumulated the following budget data for the year 2020 Sales: 31,330 units, unit selling price $85 1 2. Cost of one unit of finished goods: direct materials 1 pound at $6 per pound, direct labor 3 hours at $13 per hour, and manufacturing overhead $6 per direct labor hour. 3. Inventories (raw materials only): beginning, 10,330 pounds; ending, 15,230 pounds. Selling and administrative expenses: $170,000; interest expense: $30,000 4. 5. Income taxes: 30% of income before income taxes. Prepare a schedule showing the computation of cost of goods sold for 2020. FULTZ COMPANY Computation of Cost of Goods Sold Cost of one unit of finished goods: Direct materials Direct labor Manufacturing overhead Total Cost of Goods Sold

Answer 1

FULTZ COMPANY Computation of cost of goods sold For the year ended 31, 2020 Cost of one unit of finsihed goods: Direct materials Direct labor ($13 x 3) Manufacturing overhead ($6 x 3) Total Cost of goods sold ($63 x 31,330 units) $1,973,790

FULTZ COMPANY Budgeted Income Statement For the year ended 31, 2020 Sales revenue (31,330 x $85) Less: Cost of goods sold Gross profit Less: Selling and administrative expense Income from operations before interest and tax Less: Interest expense Profit before tax Less: Income tax expense @ 30% Profit after tax 2,663,050 1,973,790 689,260 170,000 519,260 30,000 489,260 146,778 342,482