Belmain Co. expects to maintain the same inventories at the end of 20Y7 as at the beginning of the year. The total of all production costs for the year is therefore assumed to be equal to the cost of goods sold. With this in mind, the various department heads were asked to submit estimates of the costs for their departments during the year. A summary report of these estimates is as follows: Estimated Estimated Variable Cost Fixed Cost (per unit sold) Production costs: Direct materials $22 Direct labor 14 Factory overhead $414,000 11 Selling expenses: Sales salaries and commissions 86,000 5 Advertising 29,100 Travel 6,500 Miscellaneous selling expense 7,100 4 Administrative expenses: Office and officers' salaries 84,100 Supplies 10,300 2 Miscellaneous administrative expense 9,700 2 Total $646,800 $60 It is expected that 7,920 units will be sold at a price of $200 a unit. Maximum sales within the relevant range are 10,000 units. Required: como ctatomont for 2 OY7
Belmain Co. expects to maintain the same inventories at the end of 20Y7 as at the beginning of the year. The total of all production costs for the year is therefore assumed to be equal to the cost of goods sold. With this in mind, the various department heads were asked to submit estimates of the costs for their departments during the year. A summary report of these estimates is as follows: Estimated Estimated Variable Cost Fixed Cost (per unit sold) Production costs: Direct materials $22 Direct labor 14 Factory overhead $414,000 11 Selling expenses: Sales salaries and commissions 86,000 5 Advertising 29,100 Travel 6,500 Miscellaneous selling expense 7,100 4 Administrative expenses: Office and officers' salaries 84,100 Supplies 10,300 2 Miscellaneous administrative expense 9,700 2 Total $646,800 $60 It is expected that 7,920 units will be sold at a price of $200 a unit. Maximum sales within the relevant range are 10,000 units. Required: como ctatomont for 2 OY7
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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Transcribed Image Text:Belmain Co. expects to maintain the same inventories at the end of 20Y7 as at the beginning of the year. The total of all production costs for the year is therefore
assumed to be equal to the cost of goods sold. With this in mind, the various department heads were asked to submit estimates of the costs for their departments during
the year. A summary report of these estimates is as follows:
Estimated
Estimated Variable Cost
Fixed Cost
(per unit sold)
Production costs:
Direct materials
$22
Direct labor
14
Factory overhead
$414,000
11
Selling expenses:
Sales salaries and commissions
86,000
Advertising
29,100
Travel
6,500
Miscellaneous selling expense
7,100
4
Administrative expenses:
Office and officers' salaries
84,100
Supplies
10,300
2
Miscellaneous administrative expense
9,700
2
Total
$646,800
$60
It is expected that 7,920 units will be sold at a price of $200 a unit. Maximum sales within the relevant range are 10,000 units.
Required:
1.
Prepare an estimated income statement for 20Y7.
Transcribed Image Text:Sales
Cost of goods sold:
Direct materials v
Direct labor
Factory overhead
Total cost of goods sold
Gross profit
Expenses:
Selling expenses:
Sales salaries and commissions
Advertising
Travel V
Miscellaneous selling expense
Total selling expenses
Administrative expenses:
Office and officers' salaries
Supplies v
Miscellaneous administrative expense v
Total administrative expenses
Total expenses
%24
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