EXERCISE 5

Income Statement; Schedule of Cost of Goods Manufactured ABC Corporation, a manufacturing company, produces a single product. The following information has been taken from the company's production, sales, and cost records for the just completed year.

Production in units . . . . . . . . . . . . . . . . . . . . . . . 29,000

Sales in units . . . . . . . . . . . . . . . . . . . . . . . . . . . ? Ending finished goods inventory in units . . . . . . ?

Sales in dollars . . . . . . . . . . . . . . . . . . . . . . . . . $1,300,000 Costs:

Direct labor . . . . . . . . . . . . . . . . . . . . . . . . . . . $90,000

Raw materials purchased . . . . . . . . . . . . . . . $480,000

Manufacturing overhead . . . . . . . . . . . . . . . . $300,000

Selling and administrative expenses . . . . . . . $380,000

Beginning of End of the Year the Year Inventories: Raw materials $20,000 $30,000 Work in process $50,000 $40,000 Finished goods $0 ?

The finished goods inventory is being carried at the average unit production cost for the year. The selling price of the product is $50 per unit.

Required: 1

1 a schedule of cost of goods manufactured for the year. 2.

Compute the following: a. The number of units in the finished goods inventory at the end of the year.

b. The cost of the units in the finished goods inventory at the end of the year.

3. income statement for the year.