Thanks Learning Activity The Traditional Income Statement Assume Maria Lopez owns and operates a local business that produces tennis rackets Her company Swing Into Action recorded the following costs for the month Factory rent $4,000 Company advertising $500 Wages paid to assembly workers $50,000 Depreciation for salespersons' vehicles $1,000 Glue $250 Utilities for factory $1,500 Production supervisors' salary $4,500 President's salary $6,000 Metal(for racquet frame) $8,000 Strings(for racquet) $1,600 Sales commissions $1,400 Factory Insurance $3,000 Depreciation on factory machinery $4,000 Wages paid to stringers of racquets $5,800 Required Identify each of the preceding costs as either a manufacturing or non manufacturing costs If the cost is a manufacturing costs, decide whether it is direct materials(DM), direct labor(DL) or manufacturing overhead(MOH) Determine the total amount for a) DM b) DL and c) MOH Assume 1,000 racquets were produced for the month, calculate the cost per tennis racquet Assume 800 racquets were sold for $120 per racquet, calculate the cost of goods sold What would be the dollar balance in the inventory account What would be the gross margin for the month What are the selling, general and administrative expenses for the month What is net operating income for the month Produce a traditional income statement to support your answer Maria wants you to explain why the depreciation expense on the salespersons' vehicles is treated differently than the depreciation on the factory machines Explain why these costs are treated differently and what the implications are for Maria's financial statements in terms of the balance sheet and income statement

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Thanks!!!! Learning Activity: The Traditional Income Statement Assume Maria Lopez owns and operates a local business that produces tennis rackets. Her company Swing Into Action

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Learning Activity: The Traditional Income Statement

Assume Maria Lopez owns and operates a local business that produces tennis rackets. Her company "Swing Into Action" recorded the following costs for the month:

Factory rent	$4,000
Company advertising	$500
Wages paid to assembly workers	$50,000
Depreciation for salespersons' vehicles	$1,000
Glue	$250
Utilities for factory	$1,500
Production supervisors' salary	$4,500
President's salary	$6,000
Metal(for racquet frame)	$8,000
Strings(for racquet)	$1,600
Sales commissions	$1,400
Factory Insurance	$3,000
Depreciation on factory machinery	$4,000
Wages paid to stringers of racquets	$5,800

Required:

Identify each of the preceding costs as either a manufacturing or non-manufacturing costs. If the cost is a manufacturing costs, decide whether it is direct materials(DM), direct labor(DL) or manufacturing overhead(MOH).
Determine the total amount for a) DM b) DL and c) MOH.
Assume 1,000 racquets were produced for the month, calculate the cost per tennis racquet.
Assume 800 racquets were sold for $120 per racquet, calculate the cost of goods sold.
What would be the dollar balance in the inventory account.
What would be the gross margin for the month?
What are the selling, general and administrative expenses for the month?
What is net operating income for the month? Produce a traditional income statement to support your answer.
Maria wants you to explain why the depreciation expense on the salespersons' vehicles is treated differently than the depreciation on the factory machines. Explain why these costs are treated differently and what the implications are for Maria's financial statements in terms of the balance sheet and income statement.