Question

The following selected information was extracted from the 20x1 accounting records of Lone Oak Products:

Answer 1

Answer:

a. $513,000

b. $913,200

c. $926,400

d. $344,100

e. 11,340 units

Explanation:

a. manufacturing overhead for the year.

Manufacturing Overhead = indirect manufacturing costs

therefore,

Manufacturing Overhead = $109,000 (Indirect labor) + $80,000 x 75 % (Building depreciation) + $344,000 (Other factory costs)

                                          = $513,000

b. cost of goods manufactured.

Cost of Goods Manufactured = Beginning Work In Process + Manufacturing Costs for the Period - Ending Work In Process

                                                 = $35,700 + ($15,800 + $175,000 - $18,200) + $254,000 + $513,000 - $62,100

                                                 = $913,200

c. cost of goods sold.

Cost of Goods Sold = Beginning Finished Goods + Cost of Goods Manufactured - Ending Finished Goods

                                 = $111,100 + $913,200 - $97,900

                                 = $926,400

d. net income for 20x1, assuming a 30% income tax rate.

Net Income = Gross Profit (Sales - Cost of Goods Sold) - Expenses

                    = $1,495,000 - $133,000 - $195,000 - ($80,000 x 25%)

                    = $1,147,000

Income tax = 1,147,000 x 30%

                   = $344,100

therefore,

Net Income = $1,147,000 - $344,100 = $802,900

e. number of completed units manufactured during the year.

First Calculate Number of Units Sold

Number of Units Sold = 1,495,000 ÷ $130 = 11,500 units

Units manufactured = Units Sold + Ending Finished Inventory - Beginning Finished Inventory

                                 = 11,500 + 1,190 - 1,350

                                 = 11,340 units