I-17.04 Problem

I-17.04 Problem - general and administrative costs. Income...

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I-17.04 Grange Corporation is a manufacturer of precision drill bits. The bits are sold to machine and equipment dealers, and marketing is handled via a network of regionalized manufacturer representatives. The only selling expenses pertain to commissions paid to the manufacturer representatives. The commissions are 7% of total sales. The following information pertains to operations during the calendar year 20X9. Sales $14,409,435 Administrative salaries 876,090 Direct labor 3,399,674 Indirect labor 1,232,055 Total depreciation 310,300 Total utilities 260,000 Interest expense 67,500 Other factory overhead 77,454 Of the total depreciation, 70% relates to manufacturing and 30% relates to general and administrative costs. Of the total utilities, 60% relates to manufacturing and 40% relates to
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Unformatted text preview: general and administrative costs. Income taxes are 33% of income before taxes. Following is information about various inventory components: Raw Materials Indirect Materials Work in Process Finished Goods Beginning balance $ 775,090 $ 55,080 $ 1,213,678 $ 1,242,664 Purchases 4,334,665 320,500 n/a n/a Ending balance 812,332 71,715 944,070 1,553,509 (a) Use the above information to construct a schedule of cost of goods manufactured for the year ending December 31, 20X9. (b) Use the above information to construct a schedule of cost of goods sold for the year ending December 31, 20X9. (c) Use the above information to construct an income statement for the year ending December 31, 20X9....
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This note was uploaded on 02/29/2012 for the course ACCOUNTING 101 taught by Professor Hudack during the Spring '11 term at FIU.

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