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Salter+Company

# Salter+Company - Managerial Accounting and Cost Concepts 71...

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Managerial Accounting and Cost Concepts 71 The finished goods inventory is being carried at the average unit production cost for the year. The selling price of the product is \$50 per unit. Required: 1. Prepare a schedule of cost of goods manufactured for the year. 2. Compute the following: a. The number of units in the finished goods inventory at the end of the year. b. The cost of the units in the finished goods inventory at the end of the year. Prepare an income statement for the year. PROBLEM 2-2S Working with Incomplete Data from the Income Statement and Schedule of Cost of Goods Manufactured [L04, LOS] Supply the missing data in the following cases. Each case is independent of the others. Schedule of Cost of Goods Manufactured Direct materials ......................... \$4,500 \$6,000 \$5,000 \$3,000 Direct labor ............................. ? \$3,000 \$7,000 \$4,000 Manufacturing overhead .................. \$5,000 \$4,000 ? \$9,000 Total manufacturing costs ................. \$18,500 ? \$20,000 ? Beginning work in process inventory ......... \$2,500 ? \$3,000 ? Ending work in process inventory ........... ? \$1,000 \$4,000 \$3,000 Cost of goods manufactured ............... \$18,000 \$14,000 ? ? Income Statement Sales ................................. \$30,000 \$21,000 \$36,000 \$40,000 Beginning finished goods inventory .......... \$1,000 \$2,500 ? \$2,000 Cost of goods manufactured ............... \$18,000 \$14,000 ? \$17,500 Goods available for sale ................... ? ? ? ? Ending finished goods inventory ............ ? \$1,500 \$4,000 \$3,500 Cost of goods sold ....................... \$17,000 ? \$18,500 ? Gross margin ........................... \$13,000 ? \$17,500 ? Selling and administrative expenses ......... ? \$3,500 ? ? Net operating income ..................... \$4,000 ?

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