Required: Prepare a Manufacturing statement and an Income Statement. Semi-Tough Company makes pottery that sells for $100 per unit. Each unit of pottery uses 4 kg. of materials. Each kg. cost $7.00. There is no waste. Beginning materials inventory was 5,000 kg. Ending materials inventory was 2,000 kg. Materials inventory purchased was 57,000 kg. WIP inventory, beg. 2,000 units valued at $20,000 WIP inventory, end 2,000 units valued at $10,000 Beginning finished goods inventory was 3,000 units at $52.00 each. Ending finished goods inventory was 4,000 units at the average manufacturing cost for the current period. Remember the formula to calculate average cost: Cost of goods manufactured / # of units produced Direct labour cost, $250,000. There is no need to separate variable and fixed costs here. Still, you need to decide which costs are factory overhead (those need to go on the manufacturing statement) and which costs are operating expenses( they need to go on the income statement). Factory supplies $22,000. Office supplies exp. $36,000 Depreciation, office equip. $4,000 Marketing exp. $32,000 Factory utilities $40,000 Depreciation, factory $31,000 Factory supervision $27,000 Admin. Exp. $24,000

The following information is given:

Kg:

Direct material beg 5,000

DM Purchases 57,000

DM ending 2,000

units:

FG Beg 3,000 units FG End 4,000 units

Using the above information, calculate the material we used in kg:

kg: Units:

DM Beg FG Beg

+purch + Units produced

= DM Available = units available

DM end FG end

= Direct material used = UNITS SOLD

We used ______________kg of material. If each unit requires ___ kg of material Then we must have produced___________ units. Average costing method = COGM / # of units PRODUCED