B E F G H 1 J K L D Sales Cost of goods sold Gross profit Selling expenses Promotional materials Infomercial campaign Shipping expenses Total selling expenses Administrative expenses Legal expenses Total operating expenses Income from operations 2,000,000 800,000 $ Cost of goods sold supporting calculation: Manufacturing cost per unit (knife) Direct materials Hardened steel blanks Wood (for handie) Packaging Total direct materials Direct labor Factory overhead Total manufacturing cost per knife x Number of units sold Cost of goods sold 4.00 1.50 0.50 7 8 39 40 41 42 43 1,120.000 44 45 2. 46 47 48 49 50 51 52 53 Finished goods inventory balance, December 31, 2016 Units produced Less: Units sold Units remaining in inventory x Manufacturing cast per unit Balance 55 Work in process inventory balance, December 31, 2016 Additional units waiting for assembly x Direct materials and overhead per unit Balance Pr. 17(2) 5A 25.000 Ready 1. Determine the missing amounts associated with each letter. Provide supporting calcu Instructions lations by completing a table with the following headings: Total Cost Unit Cost Units Sold Cost of Goods Sold June 1 Work in Quantity Process Direct Labor Factory Overhead Direct Materials Job No. 2. Determine the June 30 balances for each of the inventory accounts and factory overhead OBJ.2 000 PR 2-5A Flow of costs and income statement Ginocera Inc. is a designer, manufacturer, and distributor of low-cost, high-quality stain- less steel kitchen knives. A new kitchen knife series called the Kitchen Ninja was released for production in early 2016. In January, the company spent $600,000 to develop a late night advertising infomercial for the new product. During 2016, the company spent $1,400,000 promoting the product through these infomercials, and $800,000 in legal costs. The knives were ready for manufacture on January 1, 2016. Ginocera uses a job order cost system to accumulate costs associated with the kitchen knife. The unit direct materials cost for the knife is: Hardened steel blanks (used for knife shaft and blade) $4.00 Wood (for handie) 1.50 Packaging 0.50 The production process is straightforward. First, the hardened steel blanks, which are purchased directly from a raw material supplier, are stamped into a single piece of metal that includes both the blade and the shaft. The stamping machine requires one hour per 250 knives. After the knife shafts are stamped, they are brought to an assembly area where an employee attaches the handle to the shaft and packs the knife into a decorative box. The direct labor cost is $0.50 per unit. Chapter 2 Job Order Costing 73 The knives are sold to stores. Each store is given promotional materials, such as post- ers and aisle displays. Promotional materials cost $60 per store. In addition, shipping costs average $0.20 per knife. Total completed production was 1,200,000 units during the year. Other information is as follows: Number of customers (stores) 60,000 Number of knives sold 1,120,000 Wholesale price (to store) per knife $16 Factory overhead cost is applied to jobs at the rate of $800 per stamping machine hour after the knife blanks are stamped. There were an additional 25,000 stamped knives, handles, and cases waiting to be assembled on December 31, 2016. Instructions 1. Prepare an annual income statement for the Kitchen Ninja knife series, including sup- porting calculations, from the information provided. 2. Determine the balances in the work in process and finished goods inventories for the Kitchen Ninja knife series on December 31, 2016. Series B