Exercise 9-13 (Video)

Fultz Company has accumulated the following budget data for the year 2020.

1.Sales: 30,000 units, unit selling price $85.

2.Cost of one unit of finished goods: direct materials 1 pound at $5 per pound, direct labor 3 hours at $15 per hour, and manufacturing overhead $5 per direct labor hour.

3.Inventories (raw materials only): beginning, 10,000 pounds; ending, 15,000 pounds.

4.Selling and administrative expenses: $170,000; interest expense: $30,000.

5.Income taxes: 30% of income before income taxes.

Prepare a schedule showing the computation of cost of goods sold for 2020. FULTZ COMPANY Computation of Cost of Goods Sold

For the Quarter Ending December 31, 2020December 31, 2020For the Year Ending December 31, 2020

Cost of one unit of finished goods:

Direct materials

$

Direct labor

Manufacturing overhead

Total$

Cost of Goods Sold$

Prepare a budgeted multiple-step income statement for 2020. FULTZ COMPANY Budgeted Income Statement

For the Year Ending December 31, 2020For the Quarter Ending December 31, 2020December 31, 2020

SalesSelling and Administrative ExpensesIncome Tax ExpenseIncome before Income TaxesTotal Operating ExpensesEnding InventoryBeginning InventoryCost of Goods SoldNet Income / (Loss)Operating ExpensesPurchasesIncome from OperationsGross Profit

$

Ending InventoryNet Income / (Loss)Income before Income TaxesTotal Operating ExpensesOperating ExpensesGross ProfitCost of Goods SoldPurchasesIncome Tax ExpenseIncome from OperationsSalesSelling and Administrative ExpensesBeginning Inventory

Income before Income TaxesPurchasesSelling and Administrative ExpensesOperating ExpensesEnding InventoryIncome from OperationsGross ProfitTotal Operating ExpensesBeginning InventoryIncome Tax ExpenseNet Income / (Loss)SalesCost of Goods Sold

Operating ExpensesTotal Operating ExpensesPurchasesSelling and Administrative ExpensesBeginning InventoryCost of Goods SoldEnding InventoryGross ProfitNet Income / (Loss)Income before Income TaxesIncome from OperationsIncome Tax ExpenseSales

PurchasesNet Income / (Loss)Cost of Goods SoldGross ProfitBeginning InventoryIncome before Income TaxesEnding InventorySalesSelling and Administrative ExpensesTotal Operating ExpensesIncome from OperationsIncome Tax ExpenseOperating Expenses

Income from OperationsIncome before Income TaxesSalesIncome Tax ExpenseSelling and Administrative ExpensesTotal Operating ExpensesNet Income / (Loss)Interest ExpenseBeginning InventoryCost of Goods SoldEnding InventoryGross ProfitPurchases

Operating ExpensesSalesBeginning InventoryPurchasesSelling and Administrative ExpensesCost of Goods SoldTotal Operating ExpensesIncome before Income TaxesEnding InventoryGross ProfitIncome Tax ExpenseIncome from OperationsNet Income / (Loss)

Cost of Goods SoldSelling and Administrative ExpensesTotal Operating ExpensesBeginning InventorySalesPurchasesEnding InventoryGross ProfitOperating ExpensesIncome before Income TaxesIncome from OperationsIncome Tax ExpenseNet Income / (Loss)

Cost of Goods SoldBeginning InventoryEnding InventorySelling and Administrative ExpensesGross ProfitOperating ExpensesTotal Operating ExpensesIncome from OperationsIncome before Income TaxesIncome Tax ExpenseNet Income / (Loss)PurchasesSales

$