Question
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.
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