Question
Income Statement, Cost of Goods Manufactured Spencer Company produced 200,000 cases of sports drinks during the past calendar year. Each case of 1-liter bottles sells
Income Statement, Cost of Goods Manufactured
Spencer Company produced 200,000 cases of sports drinks during the past calendar year. Each case of 1-liter bottles sells for $36. Spencer had 2,500 cases of sports drinks in finished goods inventory at the beginning of the year. At the end of the year, there were 11,500 cases of sports drinks in finished goods inventory. Spencers accounting records provide the following information:
Purchases of direct materials | $2,360,000 |
Direct materials inventory, January 1 | 290,000 |
Direct materials inventory, December 31 | 110,000 |
Direct labor | 1,100,000 |
Indirect labor | 334,000 |
Depreciation, factory building | 525,000 |
Depreciation, factory equipment | 416,000 |
Property taxes on factory | 65,000 |
Utilities, factory | 150,000 |
Insurance on factory | 200,000 |
Salary, sales supervisor | 85,000 |
Commissions, salespersons | 214,000 |
Advertising | 500,000 |
General administration | 390,000 |
Work-in-process inventory, January 1 | 440,000 |
Work-in-process inventory, December 31 | 750,000 |
Finished goods inventory, January 1 | 107,500 |
Finished goods inventory, December 31 | 488,750 |
Required:
1. Prepare a cost of goods manufactured statement.
Spencer Company | ||
Statement of Cost of Goods Manufactured | ||
For the Year Ended December 31 | ||
Direct materials: | ||
$ | ||
$ | ||
$ | ||
Manufacturing overhead: | ||
$ | ||
Total manufacturing costs added | $ | |
Cost of goods manufactured | $ |
2. Compute the cost of producing one case of sports drink last year. If required, round your answer to the nearest cent.
$ per case
3. Prepare an income statement on an absorption-costing basis. Show the percentage of sales that each line item represents. Round the percent to four decimal places before converting to a percentage. For example, .88349 would be rounded to .8835 and entered as 88.35.
Spencer Company | |||
Income Statement: Absorption Costing | |||
For the Year Ended December 31 | |||
Percent | |||
% | |||
Cost of goods sold: | |||
% | |||
Less: Operating expenses: | |||
% | |||
% | |||
% |
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