Question

Cost of Goods Manufactured and Sold Income Statement P2-A The following sales and cost data has been accumulated for the Blueberry Company for the year ended June 30, Year 2: Inventories Raw materials Work in process Finished goods $ Beginning 9,000 32,000 17,000 Ending 12,000 30,000 22,000 Advertising expense Utilities, factory mo Depreciation, office equipment Indirect materials Property taxes, office building Purchases of raw materials Rent, office Rent, factory mo Utilities, office Direct labor Sales commissions SMaries Depreciation, factory equipment mo Sales 32,000 16,000 5,000 3,000 4,000 73,000 8,000 30,000 6,000 80,000 50,000 9,000 500,000 Required 1) Prepare a schedule of cost of goods manufactured in good form. 2) Prepare an income statement. 3) Assume that the company produced the equivalent of 10,000 units of product during the year just completed. What was the unit cost for direct materials? What was the unit cost for rent, factory? 4) Assume that the company expects to produce 20.000 units of product during the next year. For direct materials and rent, factory, what would be the per unit cost and what would be the total cost?

Answer 1

1) Cost of goods manufactured:		Amount $	Amount $
WIP - Ob			32000
RM:
Ob	9000
ADD: Purcha.	73000
Total available	82000
Less: Cb	12000
RM used		70000
D Lab		80000
Manuf. Overhead:
Utilities	16000
Ind mate	3000
rent, fact.	30000
dep fact.	9000
Total overhead		58000
Total manufacturing incurred			208000
Total WIP			240000
Less:Cl WIP			30000
COST OF GOODS MANUFACTURED			210000
2) Income Statement:
		Amount $
Sales		500000
Less: COGS:
FG OB	17000
add: Cost of Goods manuf.	210000
Total available for sale	227000
less: FG CB	22000
COGS		205000
Gross Profit		295000
Less: Selling & Admin exp.:
Advertising	32000
Dep office	5000
Property tax office	4000
Rent office	8000
Utilities office	6000
Sales salaries	50000
total Admin & Selling exp.		105000
Net Operating Income		190000
3) cost of DM = 70000/10000 = $7 per finished unit
Cost of rent factory = 30000 / 10000 = $3 per finished unit
4) next year, the cost per unit would be:
cost of DM	20000*7=	140000
cost of rent factory	20000*3=	60000
Total cost		200000