Question
Buck & Company incurred the following costs during August: Raw materials purchased $ 43,270 Direct labor ($12.3 per hour) 54,366 Manufacturing overhead (actual) 90,140 Selling
Buck & Company incurred the following costs during August: Raw materials purchased $ 43,270 Direct labor ($12.3 per hour) 54,366 Manufacturing overhead (actual) 90,140 Selling expenses 31,450 Administrative expenses 14,150 Interest expense 6,274 Manufacturing overhead is applied on the basis of $19 per direct labor hour. Assume that overapplied or underapplied overhead is transferred to cost of goods sold only at the end of the year. During the month, 4,040 units of product were manufactured and 4,500 units of product were sold. On August 1 and August 31, Buck & Company carried the following inventory balances: August 1 August 31 Raw materials $ 19,600 $ 17,300 Work in process 53,300 56,500 Finished goods 41,100 20,523 Required: a-1. Prepare a statement of cost of goods manufactured for the month of August. (Amounts to be deducted should be indicated by minus sign.) a-2. Calculate the average cost per unit of product manufactured. (Round your answer to 2 decimal places.) b. Calculate the cost of goods sold during August. c-1. Calculate the difference between cost of goods manufactured and cost of goods sold. (Round intermediate calculations 2 decimal places.) c-2. How will this amount be reported in the financial statements? Raw materials inventory. Finished goods inventory. Work in progress inventory. d. Prepare a traditional (absorption) income statement for Buck & Company for the month of August. Assume that sales for the month were $281,900 and the company's effective income tax rate was 30%.
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