Question 2-50 Cost of Goods Production, Profit and Loss Statement

The W. W. Phillips Company produces 4,000 leather recliners throughout the year. This recliner is selling well

$400 each. Phillips had 500 recliners in finished goods inventory at the beginning of the year.

At the end of the year, there were 700 recliners in finished goods inventory. Phillips accounting

The note provides the following information:

1. Purchased raw materials $320,000

2. Initial material inventory 46,800

3. Final materials inventory 66,800

4. Direct workforce 200,000

5. Indirect labor 40,000

6. Rent, factory building 42,000

7. Depreciation, factory equipment 60,000

8. Utilities, factory 11,900

9. Salary, sales supervisor $90,000

10. Commission, sales force 180,000

11. General administration 300,000

Starting work in progress

1. Inventory 13,040

2. Ending inventory of goods in process 14,940

3. Initial finished goods inventory 80,000

4. Ending finished goods inventory 114,100

Required:

1. Prepare a cost of goods manufactured report.

2. Calculate the average cost of producing one unit of product in that year.

3. Prepare profit and loss statements for external users.