Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Cost and sales information for the most recent fiscal year are shown below: WALLACE RIVER COMPANY Cost and Sales Information For the Year Ended December

Cost and sales information for the most recent fiscal year are shown below:

WALLACE RIVER COMPANY
Cost and Sales Information
For the Year Ended December 31
Purchases of raw materials $ 90,000
Raw materials inventory, beginning 10,000
Raw materials, ending 17,000
Depreciation, factory 42,000
Insurance, factory 5,000
Direct labour 60,000
Maintenance, factory 30,000
Administrative expense 70,000
Sales 450,000
Utilities, factory 27,000
Supplies, factory 1,000
Selling expense 80,000
Advertising expense 20,000
Indirect labour, factory 65,000
Work in process inventory, beginning 7,000
Work in process inventory, ending 30,000
Finished goods inventory, beginning 10,000
Finished goods inventory, ending 40,000

Required:

1. Prepare a schedule of cost of goods manufactured.

2. Prepare an income statement.

3. Assume that the company produced 10,000 units of product during the year. What was the average cost per unit for direct materials? What was the average cost per unit for factory depreciation? (Round your answers to 2 decimal places.)

4. Assume that the company expects to produce and sell 15,000 units of product during the coming year. What average cost per unit and what total cost would you expect the company to incur for direct materials and for factory depreciation at this level of activity? Assume that raw materials costs charged by suppliers will not change next year. For factory depreciation, assume that the company uses straight-line depreciation and that the factory equipment has five years of useful life remaining. (Round your answers to 2 decimal places.)

5. This part of the question is not part of your Connect assignment.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing & Assurance Services

Authors: Timothy Louwers, Penelope Bagley, Allen Blay, Jerry Strawser, Jay Thibodeau

8th Edition

978-1260703733, 1260703738

More Books

Students also viewed these Accounting questions

Question

What is a digital health platform?

Answered: 1 week ago

Question

What does this key public know about this issue?

Answered: 1 week ago

Question

What is the nature and type of each key public?

Answered: 1 week ago

Question

What does this public need on this issue?

Answered: 1 week ago