Answer:
Instructions are listed below.
Explanation:
Giving the following information:
Each bottle is sold for $5. The company recently had the following costs to produce 12,000 units of its product during August:
(1) Rent of $5,000 on a billboard to help advertise the product
(2) Rent on factory and equipment of $8,000
(3) Total payroll for hourly-paid, factory workers $24,000
(4) Tomatoes, onions, spices, and bottles $18,000
(5) Total payroll for salaried, administrative staff $6,000
The company sold 8,000 units.
A) First, we need to calculate the total and unitary cost of production:
Total cost= direct material + direct labor + factory overhead
Total cost= tomatoes, onions, spices, and bottles + Total payroll for hourly-paid, factory workers + Rent on factory and equipment
Total cost= 18,000 + 24,000 + 8,000
TC= 50,000
Unitary cost= 50,000/12,000= $4.17 per bottle
Now, we can calculate the cost of goods sold:
COGS= unitary cost* units sold= 4.17*8,000= $33,360
B) Income statement:
Sales= 8,000*5= 40,000
COGS= (33,360)
Gross profit= 6,640
Selling expense= (5,000)
Administrative expense= (6,000)
Net operating income= (4,360)
C) Inventory= unitary cost* ending inventory in units
Inventory= 4.17*4,000= $16,680
