Cost of goods manufactured, cost of goods sold, and income statementGrandSlam, Inc., incurred the following costs during March:Selling expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $25,340Direct labor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37,752Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,135Manufacturing overhead, actual. . . . . . . . . . . . . . . . . . . . . . . . 32,760Raw materials used . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61,464Administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,675 Required:During the month, 2,600 units of product were manufactured and 1,450 units of product were sold. On March 1, GrandSlam, Inc., carried no inventories. On March 31, there were no inventories for raw materials or work in process.a. Calculate the cost of goods manufactured during March and the average cost per unit of product manufactured.b. Calculate the cost of goods sold during March.c. Calculate the difference between cost of goods manufactured and cost of goods sold. How will this amount be reported in the financial statements?d. (Optional) Prepare a traditional (absorption) income statement for GrandSlam, Inc., for the month of March. Assume that sales for the month were $138,040and the company’s effective income tax rate was 35%
Cost of goods
GrandSlam, Inc., incurred the following costs during March:
Selling expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $25,340
Direct labor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37,752
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,135
Manufacturing
Raw materials used . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61,464
Administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,675
Required:
During the month, 2,600 units of product were manufactured and 1,450 units of product were sold. On March 1, GrandSlam, Inc., carried no inventories. On March 31, there were no inventories for raw materials or work in process.
a. Calculate the cost of goods manufactured during March and the average cost per unit of product manufactured.
b. Calculate the cost of goods sold during March.
c. Calculate the difference between cost of goods manufactured and cost of goods sold. How will this amount be reported in the financial statements?
d. (Optional) Prepare a traditional (absorption) income statement for GrandSlam, Inc., for the month of March. Assume that sales for the month were $138,040and the company’s effective income tax rate was 35%
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