Question
The CEO of Work-Longer-Hours Inc, Elon Zuckerburg started manufacturing innovative standing 24-7 work desks. The company manufactured 4,000 work desks during the entire year.Elon says
The CEO of Work-Longer-Hours Inc, Elon Zuckerburg started manufacturing innovative standing "24-7" work desks.
The company manufactured 4,000 work desks during the entire year.Elon says they have 500 desks stations in the finished goods inventory at the beginning of the year and that the retail selling price for each desk is $400. At the end of the year, there were 700 work desks in the finished goods inventory.Elon provides the following information and asks you to create a Cost of Goods Manufactured (COGM) statement and also an income statement and to give them some advice for the business costs based on these numbers:
Utilities. Work-Longer Hours Company Factory$ 11,900
Sales Supervisors Salary 90,000
Salespersons, Commission180,000
General administration300,000
Purchases in raw materials320,000
Beginning materials inventory46,800
Ending materials inventory66,800
Beginning work in process inventory13,040
Ending work in process inventory14,940
Beginning finished good inventory 80,000
Ending finished good inventory114,100
Direct Labour200,000
Indirect Labour40,000
Rent, Factory Building42,000
Depreciation, Factory equipment60,000
SOLVE and ANALYZE:
1a) Elon asks you to prepare a statement of cost of goods manufactured (COGM) and 1b) an income statement.
2)After reviewing the statement of COGM and income statement do an analysis for Elon to determine what are the biggest costs and give solutions on how to reduce costs, boost sales and improve profits next year using management accounting theory
Step by Step Solution
There are 3 Steps involved in it
Step: 1
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-text-image.webp)
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Step: 3
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started