Flow of Costs and Income Statement

R-Tunes Inc. is in the business of developing, promoting, and selling musical talent online and with compact discs (CDs). The company signed a new group, called Cyclone Panic, on January 1, 20Y8. For the first six months of 20Y8, the company spent $2,232,000 on a media campaign for Cyclone Panic and $670,000 in legal costs. The CD production began on April 1, 20Y8.

R-Tunes uses a job order cost system to accumulate costs associated with a CD title. The unit direct materials cost for the CD is:

Blank CD	$1.40
Case	0.50
Song lyric insert	0.50

The production process is straightforward. First, the blank CDs are brought to a production area where the digital soundtrack is copied onto the CD. The copying machine can copy 1,800 CDs per hour.

After the CDs are copied, they are brought to an assembly area where an employee packs the CD with a case and song lyric insert. The direct labor cost is $0.20 per CD.

The CDs are sold to record stores. Each record store is given promotional materials, such as posters and aisle displays. Promotional materials cost $30 per store. In addition, shipping costs average $0.20 per CD.

Total completed production was 744,000 units during the year. Other information is as follows:

Number of customers (record stores)	31,600
Number of CDs sold	632,400
Wholesale price (to record store) per CD	$12

Factory overhead cost is applied to jobs at the rate of $900 per copy machine hour. There were an additional 186,000 copied CDs, packages, and inserts waiting to be assembled on December 31, 20Y8.

1. Do an annual income statement for the Cyclone Panic CD, including supporting calculations, from the information above. Round unit costs to the nearest cent, if rounding is required.

Cost of goods sold Factory overheadGross profitSalesWork in process			$- Select -
Cost of goods soldFinished goodsGross profitMaterialsSales			- Select -
Cost of goods soldFactory overheadGross profitMedia campaignShipping expenses			$- Select -
Selling expenses:
Factory overheadFinished goodsLegal expensesMedia campaignWork in process	$- Select -
Factory overheadLegal expensesPromotional materialsSalesWork in process	- Select -
Cost of goods soldFactory overheadFinished goodsLegal expensesShipping expenses	- Select -
Total selling expenses		$fill in the blank 3c222800907dfff_13
Administrative expenses:
Factory overheadLegal expensesMedia campaignPromotional materialsShipping expenses		- Select -
Total operating expenses			fill in the blank 3c222800907dfff_16
Income from operations			$fill in the blank 3c222800907dfff_17
Manufacturing cost per unit (CD):
Direct materials:
Blank CDDirect laborFactory overheadSalesShipping expenses		$- Select -
Factory overheadCasePromotional materialsSalesShipping expenses		- Select -
Factory overheadLegal expensesMedia campaignPromotional materialsSong lyric insert		- Select -
Total direct materials			$fill in the blank 3c222800907dfff_24
Cost of goods soldDirect laborPromotional materialsShipping expensesStory booklet and stuffed animal			- Select -
Factory overheadJewel caseLegal expensesPromotional materialsSales			- Select -
Total manufacturing cost per CD			$fill in the blank 3c222800907dfff_29

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1. (a) Calculate the sales amount. (b) Calculate the manufacturing cost per unit. Calculate the overhead cost per unit by dividing the rate per copy machine hour by CDs per hour. (c) Multiply the manufacturing cost per unit with the number of units sold. (d) Multiply sales with the commission rate.

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2. Determine the balances in the work-in-process and finished goods inventories for the Cyclone Panic CD on December 31, 20Y8. When performing intermediate calculations, round unit costs to the nearest cent.

Finished Goods balance, December 31, 20Y8	$
Work in Process balance, December 31, 20Y8	$

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Safari File Edit View History Bookmarks Window Help @ a Wed Sep 13 8:12 AM A v2.cengagenow.com + S CHALLENGE 3.1: Utilitarianism | Introduc.. A Week 1 - Assignment c CengageNOWv2 | Online teaching and le.. Dashboard C Home | Chegg.com Week 1 - Assignment eBook 1. MP.JOB.ORDER.COSTIN... Factory overhead cost is applied to jobs at the rate of $900 per copy machine hour. There were an additional 186,000 copied CDs, packages, and inserts waiting to be assembled on December 31, 20Y8. 2. PR. 10-05.Algo Instructions: 1. Prepare an annual income statement for the Cyclone Panic CD, including supporting calculations, from the information above. Round unit costs to the nearest cent, if rounding is required. R-Tunes Inc. Cyclone Panic CD Income Statement For the Year Ended December 31, 20Y8 E Selling expenses: E Total selling expenses Administrative expenses: Total operating expenses Income from operations 2 Manufacturing cost per unit (CD): Direct materials: E Total direct materials 10800 Total manufacturing cost per CD Feedback Progress: 2/2 items Check My Work Previous Assignment Score: 0.0% Email Instructor Save and Exit Submit Assignment for Grading 18 17 SEP 13 O