Answered: Bob’s Bistro produces party-sized…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

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Bob’s Bistro produces party-sized hoagie sandwiches. For next year, Bob’s Bistro predicts that 52,300 units will be produced with the following total costs:

Direct materials	?
Direct labor	$52,000
Variable overhead	19,000
Fixed overhead	235,000

Next year, Bob’s Bistro expects to purchase $122,000 of direct materials. Projected beginning and ending inventories for direct materials and work in process are as follows:

	Direct materials Inventory	Work-in-Process Inventory
Beginning	$5,000	$10,100
Ending	$4,900	$12,100

Next year, Bob’s Bistro expects to produce 52,300 units and sell 51,600 units at a price of $17.00 each. Beginning inventory of finished goods is $41,500, and ending inventory of finished goods is expected to be $33,000. Total selling expense is projected at $28,500, and total administrative expense is projected at $116,500.

Required:

Question Content Area

1. Prepare an income statement in good form. Round the percent to four decimal places before converting to a percentage. For example, .88349 would be rounded to .8835 and entered as 88.35.

Bob's BistroIncome StatementFor the Coming Year

			Percent
Sales		$_____	_____%
Cost of goods sold		____	_____%
Gross margin		$____	_____%
Less: Operating expenses
Selling expenses	$_____
Adminstrative expenses	____	_____	_____%
Operating income		$____	____%