Midterm problems.docx - Chapter 2 Use the following information to determine the gross margin for Pacif c States Manufacturing for the year just

Midterm problems.docx - Chapter 2 Use the following...

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Chapter 2 Use the following information to determine the gross margin for Pacif c States Manufacturing for the year just ended (all amounts are in thousands of dollars): Sales $31,800 Purchases of direct materials $7,000 Direct labour $5,000 Work in process, 1/1 $800 Work in process, 1/31 $3,000 Finished goods inventory, 1/1 $4,000 Finished goods inventory, 1/31 $5,300 Accounts payable, 1/1 $1,700 Accounts payable, 1/31 $1,500 Direct materials inventory, 1/1 $6,000 Direct materials inventory, 1/31 $1,000 Indirect labour $600 Indirect materials used $500 Utilities expense, factory $1,900 Depreciation on factory equipment $3,500 Chapter 3 Stuart Manufacturing produces metal picture frames. The company's income statements for the last two years are presented below: Last year This year Units sold 50,000 70,000 Sales $800,000 $1,120,000 Less: Cost of goods sold 550,000 710,000 Gross margin 250,000 410,000 Less: Operating expenses 150,000 190,000 Net income $100,000 $220,000 The company has no beginning or ending inventories. All activity in this problem is in the relevant range.
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  • Winter '16
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