The following selected information was extracted from the 20x1 accounting records of Lone Oak Products: Required:1. Calculate Lone Oak’s manufacturing overhead for the year.2. Calculate Lone Oak’s cost of goods manufactured.3. Compute the company’s cost of goods sold.4. Determine net income for 20x1, assuming a 30% income tax rate.5. Determine the number of completed units manufactured during the year.6. Build a spreadsheet: Construct an Excel spreadsheet to solve all of the preceding requirements. Show how the solution will change if the following data change: indirect labor is $115,000 and other factory costs amount to $516,000. Raw material purchases$ 175,000Direct labor254,000Indirect labor109,000Selling and administrative salaries133,000Building depreciation*80,000Other selling and administrative expenses195,000Other factory costs .344,000Sales revenue ($130 per unit)1,495,000*Seventy-five percent of the company's building was devoted to production activities; the remaining 25 percent was used for selling andadministrative functions.Inventory data:January 1December 31Raw material..$ 15,800$18,200Work in process.35,70062,100Finished goods*111,10097,900*The January 1 and December 31 finished-goods inventory consisted of 1,350 units and 1,190 units, respectively.

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Answered: Raw material purchases $ 175,000 Direct…

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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The following selected information was extracted from the 20x1 accounting records of Lone Oak Products:

Required:
1. Calculate Lone Oak’s manufacturing overhead for the year.
2. Calculate Lone Oak’s cost of goods manufactured.
3. Compute the company’s cost of goods sold.
4. Determine net income for 20x1, assuming a 30% income tax rate.
5. Determine the number of completed units manufactured during the year.
6. Build a spreadsheet: Construct an Excel spreadsheet to solve all of the preceding requirements. Show how the solution will change if the following data change: indirect labor is $115,000 and other factory costs amount to $516,000.

Raw material purchases
$ 175,000
Direct labor
254,000
Indirect labor
109,000
Selling and administrative salaries
133,000
Building depreciation*
80,000
Other selling and administrative expenses
195,000
Other factory costs .
344,000
Sales revenue ($130 per unit)
1,495,000
*Seventy-five percent of the company's building was devoted to production activities; the remaining 25 percent was used for selling and
administrative functions.
Inventory data:
January 1
December 31
Raw material..
$ 15,800
$18,200
Work in process.
35,700
62,100
Finished goods*
111,100
97,900
*The January 1 and December 31 finished-goods inventory consisted of 1,350 units and 1,190 units, respectively.

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