Alexandria Aluminum Company, a manufacturer of recyclable soda cans, had the following inventory balances at the beginning and end of 20x1.

During 20x1, the company purchased $250,000 of raw material and spent $400,000 on direct labor.
Manufacturing overhead costs were as follows

Sales revenue was $1,105,000 for the year. Selling and administrative expenses for the year amounted to $110,000. The firm’s tax rate is 40 percent.
Required:
1. Prepare a schedule of cost of goods manufactured.
2. Prepare a schedule of cost of goods sold.
3. Prepare an income statement.
4. Build a spreadsheet: Construct an Excel spreadsheet to solve all of the preceding requirements.
Show how both cost schedules and the income statement will change if the following data change:
direct labor is $390,000 and utilities cost $35,000.

Transcribed Image Text:

Inventory Classification Raw material Work in process Finished goods January 1, 20x1 $60,000 120,000 150,000 December 31, 20x1 $ 70,000 115,000 165,000