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. Spencer's accounting records provide the following information:

Purchases of direct materials	$2,340,000
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	218,000
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:
Beginning inventory	$fill in the blank e5312df8606cfb6_2
Add: Purchases	fill in the blank e5312df8606cfb6_4
Materials available	$fill in the blank e5312df8606cfb6_6
Less: Ending inventory	fill in the blank e5312df8606cfb6_8
Direct materials used in production		$fill in the blank e5312df8606cfb6_10
Direct labor		fill in the blank e5312df8606cfb6_12
Manufacturing overhead:
Indirect labor	$fill in the blank e5312df8606cfb6_14
Depreciation, factory building	fill in the blank e5312df8606cfb6_16
Depreciation, factory equipment	fill in the blank e5312df8606cfb6_18
Property taxes on factory	fill in the blank e5312df8606cfb6_20
Utilities, factory	fill in the blank e5312df8606cfb6_22
Insurance on factory	fill in the blank e5312df8606cfb6_24	fill in the blank e5312df8606cfb6_25
Total manufacturing costs added		$fill in the blank e5312df8606cfb6_26
Add: Beginning work in process		fill in the blank e5312df8606cfb6_28
Less: Ending work in process		fill in the blank e5312df8606cfb6_30
Cost of goods manufactured		$fill in the blank e5312df8606cfb6_31

2. Compute the cost of producing one case of sports drink last year. If required, round your answer to the nearest cent.

$fill in the blank 153e47030f99fdf_1 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
Sales		$fill in the blank 202d4cf4006801d_2	fill in the blank 202d4cf4006801d_3%
Cost of goods sold:
Beginning finished goods inventory	$fill in the blank 202d4cf4006801d_5
Add: Goods available for sale	fill in the blank 202d4cf4006801d_7
Goods available for sale	$fill in the blank 202d4cf4006801d_9
Less: End. finished goods inventory	fill in the blank 202d4cf4006801d_11	fill in the blank 202d4cf4006801d_12	fill in the blank 202d4cf4006801d_13%
Gross margin		$fill in the blank 202d4cf4006801d_15	fill in the blank 202d4cf4006801d_16
Less: Operating expenses:
Salary, sales supervisor	$fill in the blank 202d4cf4006801d_18
Commissions, salespersons	fill in the blank 202d4cf4006801d_20
Advertising	fill in the blank 202d4cf4006801d_22	fill in the blank 202d4cf4006801d_23	fill in the blank 202d4cf4006801d_24%
Administrative expenses		fill in the blank 202d4cf4006801d_26	fill in the blank 202d4cf4006801d_27%
Operating income		$fill in the blank 202d4cf4006801d_29	fill in the blank 202d4cf4006801d_30%

4. Consider Step 4 "where" core issue described in Exhibit 2.5. Briefly explain why you would expect Spencers accountants to find it easy or difficult to answer this where question with respect to conducting data analyses involving its cost of goods sold.

Given that the data analyses in the question involving Spencers cost of goods sold, the accountants should easily find the data needed to conduct the desired statistical analysis.

Cost of goods sold, like any accounting data that must adhere to Generally Accepted Accounting Principles (GAAP) for public disclosure via the financial statements, should be readily available from the companys tightly controlled and easily accessible general ledger or other internal financial accounting system.