Question
W. W. Phillips Company produced 4,000 leather recliners during the year. These recliners sell for $400 each. Phillips had 500 recliners in finished goods inventory
W. W. Phillips Company produced 4,000 leather recliners during the year. These recliners sell for $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 records provide the following information:
Purchases of raw materials | $320,000 |
Beginning materials inventory | 46,800 |
Ending materials inventory | 66,800 |
Direct labor | 200,000 |
Indirect labor | 40,000 |
Rent, factory building | 42,000 |
Depreciation, factory equipment | 60,000 |
Utilities, factory | 11,900 |
Salary, sales supervisor | 90,000 |
Commissions, salespersons | 180,000 |
General administration | 300,000 |
Beginning work-in-process inventory | 13,040 |
Ending work-in-process inventory | 14,940 |
Beginning finished goods inventory | 80,000 |
Ending finished goods inventory | 114,100 |
Required: | |
1. | Prepare a statement of cost of goods manufactured. |
2. | Compute the average cost of producing one unit of product in the year. |
3. | Prepare an income statement for external users. |
Labels- Add, Less, Manufacturing overhead, Selling expenses, Amount, Descriptions-Beginning work in process, Commissions, Cost of goods manufactured, Cost of goods sold; Depreciation, factory equipment; Direct materials, Direct labor, Ending work in process, General administration expense, Gross margin, Indirect labor, Operating income, Operating loss; Rent, factory building; Sales, Sales supervisors salary, Total cost of product, Utilities, factory.
The average cost of producing one unit of product in the year was 163
.
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