Prime Cost, Conversion Cost, Preparation of Income Statement: Manufacturing Firm Kildeer Company makes easels for artists. During the last calendar year, a total of 38,000 easels were made, and 39,000 were sold for $56 each. The actual unit cost is as follows: $15.00 Direct materials Direct labor Variable overhead Fixed overhead Ending units Dollar amount $ Total unit cost $42.00 The selling expenses consisted of a commission of $0.80 per unit sold and advertising co-payments totaling $91,500. Administrative expenses, all fixed, equaled $179,000. There were no beginning and ending work-in-process inventories. Beginning finished goods inventory was $130,200 for 3,100 easels. Required: 1. Calculate the number and the dollar value of easels in ending finished goods inventory. Feedback. 6.00 Feedback Remember that cost of goods manufactured increases finished goods inventory. 2. Prepare a cost of goods sold statement. Kildeer Company Statement of Cost of Goods Sold For the Year Ended December 31 7.00 Cost of goods manufactured Add: Beginning finished goods inventory Cost of goods available for sale Less: Ending finished goods inventory Cost of goods sold 14.00 Commissions Sales Cost of goods sold Gross margin Less operating expenses: Operating income Fondback See Cornerstone 2.3. 3. Prepare an absorption-costing income statement. In addition to dollar amounts, enter the amounts as a percent, rounded to two decimal places. For example, .5235 would be 52.35% and you would enter 52.35 as your answer. Kildeer Company Income Statement: Absorption Costing For the Year Ended December 31 Advertising co-pays Administrative expenses $ $ $ $ Percent $% % $% % $ %
Prime Cost, Conversion Cost, Preparation of Income Statement: Manufacturing Firm Kildeer Company makes easels for artists. During the last calendar year, a total of 38,000 easels were made, and 39,000 were sold for $56 each. The actual unit cost is as follows: $15.00 Direct materials Direct labor Variable overhead Fixed overhead Ending units Dollar amount $ Total unit cost $42.00 The selling expenses consisted of a commission of $0.80 per unit sold and advertising co-payments totaling $91,500. Administrative expenses, all fixed, equaled $179,000. There were no beginning and ending work-in-process inventories. Beginning finished goods inventory was $130,200 for 3,100 easels. Required: 1. Calculate the number and the dollar value of easels in ending finished goods inventory. Feedback. 6.00 Feedback Remember that cost of goods manufactured increases finished goods inventory. 2. Prepare a cost of goods sold statement. Kildeer Company Statement of Cost of Goods Sold For the Year Ended December 31 7.00 Cost of goods manufactured Add: Beginning finished goods inventory Cost of goods available for sale Less: Ending finished goods inventory Cost of goods sold 14.00 Commissions Sales Cost of goods sold Gross margin Less operating expenses: Operating income Fondback See Cornerstone 2.3. 3. Prepare an absorption-costing income statement. In addition to dollar amounts, enter the amounts as a percent, rounded to two decimal places. For example, .5235 would be 52.35% and you would enter 52.35 as your answer. Kildeer Company Income Statement: Absorption Costing For the Year Ended December 31 Advertising co-pays Administrative expenses $ $ $ $ Percent $% % $% % $ %
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Prime Cost, Conversion Cost, Preparation of Income Statement: Manufacturing Firm
Kildeer Company makes easels for artists. During the last calendar year, a total of 38,000 easels were made, and 39,000 were sold for
$56 each. The actual unit cost is as follows:
Direct materials
Direct labor
Ending units
Dollar amount $
Variable overhead
Fixed overhead
Total unit cost
$42.00
The selling expenses consisted of a commission of $0.80 per unit sold and advertising co-payments totaling $91,500. Administrative
expenses, all fixed, equaled $179,000. There were no beginning and ending work-in-process inventories. Beginning finished goods.
inventory was $130,200 for 3,100 easels.
Required:
1. Calculate the number and the dollar value of easels in ending finished goods inventory.
$15.00
6.00
7.00
Feedback
Remember that cost of goods manufactured increases finished goods inventory.
2. Prepare a cost of goods sold statement.
14.00
Kildeer Company
Statement of Cost of Goods Sold
Commissions
For the Year Ended December 31
Cost of goods manufactured
Add: Beginning finished goods inventory
Cost of goods available for sale
Less: Ending finished goods inventory
Cost of goods sold
Feedback
See Cornerstone 2.3
3. Prepare an absorption-costing income statement. In addition to dollar amounts, enter the amounts as a percent, rounded to two
decimal places. For example, .5235 would be 52.35% and you would enter 52.35 as your answer.
Kildeer Company
Income Statement: Absorption Costing
For the Year Ended December 31
Operating income
Feedback
See Cornerstone 2.4
Sales
Cost of goods sold
Gross margin
Less operating expenses:
Advertising co-pays
Administrative expenses
$
$
$
$
Percent
$ %
%
$ %
%
$ %
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