A manufacturing corporation has the following financial information for the year: Inventory Balances: Beginning Ending Work in Progress $ 90,000 $ 80,000 Finished Goods $ 77,000 $ 67,000 Raw Materials $ 10,000 $ 10,000 During the year, the budgeted and actual costs were as follows: Raw Materials Labour Depreciation Factory Equipment Depreciation Office Equipment Building Rent Maintenance - Factory Equipment Utilities - Electrical Utilities - Gas Utilities - Telecom Sales Commissions Advertising Shipping Note Budget 1 310,000 2 540,000 72,000 24,000 3 100,000 60,000 4 200,000 5 100,000 6 20,000 40,000 Actual 290,000 520,000 72,000 24,000 100,000 40,000 180,000 90,000 22,000 30,000 30,000 20,000 20,000 16,000 7 Sales for the year were $1,500,000 Note 1 - Raw material For both budget and actual materials: 90% of raw materials are traced directly to specific jobs and remaining 10% of raw materials are used throughout the production process and not traced. $290,000 in materials purchased in the year. Note 2 - Labour Budget: Direct Labour $300,000 + Factory Salaries $80,000 + Head Office Salaries $160,000 = $540,000 Actual: Direct Labour $270,000 + Factory Salaries $85,000 + Head Office Salaries $163,000 = $518,000 Note 3 - Building Rent The building is shared between the factory and the administrative office. 68% of the building is related to the factory, and the remaining 32% is related to the administrative office. Note 4 - Utilities Electrical 90% of these costs are related to the factory, and 10% of these costs are related to the administrative office. Note 5 - Utilities - Gas All of the Gas is used to heat production equipment. Note 6 - Utilities - Telecom All of the Telecom costs are for sales people. Note 7 - Shipping 60% of the shipping costs are to bring raw materials to the plant. The other 40% of shipping costs are to ship finished goods to customers. (For simplicity, assume that all of the in-coming shipping costs are indirect costs and are therefore allocated to overhead.) Note 8 - Overhead The manufacturer uses Normal Costing. Overhead is allocated based on Direct Labour costs. Any under/over applied overhead is allocated to Cost of Goods Sold. Required (show all of your work): A. Calculate Cost of Goods Manufactured B. Calculate Cost of Goods Sold and an income statement C. Provide a professional assessment and interpretation (reasonable assumptions allowed) A manufacturing corporation has the following financial information for the year: Inventory Balances: Beginning Ending Work in Progress $ 90,000 $ 80,000 Finished Goods $ 77,000 $ 67,000 Raw Materials $ 10,000 $ 10,000 During the year, the budgeted and actual costs were as follows: Raw Materials Labour Depreciation Factory Equipment Depreciation Office Equipment Building Rent Maintenance - Factory Equipment Utilities - Electrical Utilities - Gas Utilities - Telecom Sales Commissions Advertising Shipping Note Budget 1 310,000 2 540,000 72,000 24,000 3 100,000 60,000 4 200,000 5 100,000 6 20,000 40,000 Actual 290,000 520,000 72,000 24,000 100,000 40,000 180,000 90,000 22,000 30,000 30,000 20,000 20,000 16,000 7 Sales for the year were $1,500,000 Note 1 - Raw material For both budget and actual materials: 90% of raw materials are traced directly to specific jobs and remaining 10% of raw materials are used throughout the production process and not traced. $290,000 in materials purchased in the year. Note 2 - Labour Budget: Direct Labour $300,000 + Factory Salaries $80,000 + Head Office Salaries $160,000 = $540,000 Actual: Direct Labour $270,000 + Factory Salaries $85,000 + Head Office Salaries $163,000 = $518,000 Note 3 - Building Rent The building is shared between the factory and the administrative office. 68% of the building is related to the factory, and the remaining 32% is related to the administrative office. Note 4 - Utilities Electrical 90% of these costs are related to the factory, and 10% of these costs are related to the administrative office. Note 5 - Utilities - Gas All of the Gas is used to heat production equipment. Note 6 - Utilities - Telecom All of the Telecom costs are for sales people. Note 7 - Shipping 60% of the shipping costs are to bring raw materials to the plant. The other 40% of shipping costs are to ship finished goods to customers. (For simplicity, assume that all of the in-coming shipping costs are indirect costs and are therefore allocated to overhead.) Note 8 - Overhead The manufacturer uses Normal Costing. Overhead is allocated based on Direct Labour costs. Any under/over applied overhead is allocated to Cost of Goods Sold. Required (show all of your work): A. Calculate Cost of Goods Manufactured B. Calculate Cost of Goods Sold and an income statement C. Provide a professional assessment and interpretation (reasonable assumptions allowed)