Chapter 2, End Of Chapter, REVIEW PROBLEMS, Exercise I
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Types of Costs, Cost of Goods Manufactured, Absorption-Costing Income Statement

 

Palmer Manufacturing produces weather vanes. For the year just ended, Palmer produced 10,000 weather vanes with the following total costs:

Direct materials$20,000
Direct labor35,000
Overhead10,000
Selling expenses6,250
Administrative expenses14,400

During the year, Palmer sold 9,800 units for $12 each. Beginning finished goods inventory consisted of 630 units with a total cost of $4,095. There were no beginning or ending inventories of work in process.

 

Required:

 

Calculate the unit costs for the following: direct materials, direct labor, overhead, prime cost, and conversion cost.

Types of Costs, Cost of Goods Manufactured, Absorption-Costing Income Statement

 

Palmer Manufacturing produces weather vanes. For the year just ended, Palmer produced 10,000 weather vanes with the following total costs:

Direct materials$20,000
Direct labor35,000
Overhead10,000
Selling expenses6,250
Administrative expenses14,400

During the year, Palmer sold 9,800 units for $12 each. Beginning finished goods inventory consisted of 630 units with a total cost of $4,095. There were no beginning or ending inventories of work in process.

 

Required:

 

Prepare schedules for cost of goods manufactured and cost of goods sold.

Types of Costs, Cost of Goods Manufactured, Absorption-Costing Income Statement

 

Palmer Manufacturing produces weather vanes. For the year just ended, Palmer produced 10,000 weather vanes with the following total costs:

Direct materials$20,000
Direct labor35,000
Overhead10,000
Selling expenses6,250
Administrative expenses14,400

During the year, Palmer sold 9,800 units for $12 each. Beginning finished goods inventory consisted of 630 units with a total cost of $4,095. There were no beginning or ending inventories of work in process.

 

Required:

 

Prepare an absorption-costing income statement for Palmer Manufacturing.

Explanation

Answer

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