Cost+flow,+income+statement+example+from+lecture+3

Cost+flow,+income+statement+example+from+lecture+3 -...

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Cost flow example: from lecture 3 _______________________________________ The following data was prepared for February by the Ayushi Company (in no particular order): Raw materials inventory, February 1 $ 4,000 Allocated overhead, February $ 8,000 Raw materials purchased, February $12,000 Raw materials used, February ? Selling expense, February $23,000 Period Raw materials inventory, February 28 $ 6,000 Direct labor, February $ 9,000 Work in process inventory, February 1 $11,000 Administrative expense, February $12,000 Period Finished goods inventory, February 1 $ 3,000 Finished goods inventory, February 28 $ 5,000 Cost of goods sold, February $18,000 Selling price per unit $ 14.50 Work in process, February 28 ? Cost of goods manufactured, February ? a. Account for Raw Materials, Work in Process, and Finished Goods. What was the ending balance of the Work in Process inventory on February 28? Raw Materials Work in Process Finished Goods Beginning balance 4,000
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Unformatted text preview: Beginning balance 11,000 Beginning balance 3,000 Purchases +12,000 Materials +10,000 COGM +20,000 Used-10,000 Labor +9,000 COGS-18,000 Ending balance =6,000 Overhead +8,000 Ending balance =5,000 COGM-20,000 Ending balance =18,000 b. Suppose the company completed 5,000 units during February, and sold 4,500 units. What is the unit product cost? How is this related to the cost of goods sold? $20,000 COGM 5,000 units completed = $4.00 cost per unit $4.00 x 4,500 units sold = $18,000 COGS (one way to think of COGS is the unit cost x number sold) c. Prepare a GAAP income statement for Ayushi Company for February. Ayushi Company Income Statement for February Revenue $65,250 $14.50 price x 4,500 units sold COGS 18,000 $4.00 unit product cost x 4,500 units sold Gross Margin $47,250 Selling and Admin. 35,000 $23,000 selling + $12,000 administrative Profit before taxes $12,250...
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This note was uploaded on 02/02/2010 for the course BUS-A 202 taught by Professor Keenan during the Spring '08 term at Indiana.

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