Answer:
<u>Computation of cost of goods sold for 2020</u>
Direct materials(1 pound× $5 ) $5
Direct labor(3 hours × $12) $36
manufacturing overhead ($8 × 3 hours) $24
Total unit cost $65
<u>Budgeted multiple-step income statement for 2020</u>
Sales ( 31,410 units × $89) 2,795,490
Less Cost of Sales (31,410 units × $65) (2,041,650)
Gross Profit 753,840
Less Operating Expenses :
Selling and administrative expenses: (170,000)
Operating Income 583,840
Less Non - Operating Expenses
Interest expense (30,000)
Income before income taxes 553,840
Income tax (553,840×30%) (166,152)
Income After income taxes 387,688
Explanation:
Cost of Sales = all manufacturing costs
Multi step - Income Statement separates income generated from Primary Activities of the Company (Operating Income) with Income generated from Secondary Activities of the Company (Non-Operating Income)
