Chapter 2, Problem 38P

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

*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:

*The January 1 and December 31 finished-goods inventory consisted of 1,350 units and 1,190 units, respectively.

Required:

1. 1. Calculate Lone Oak’s manufacturing overhead for the year.
2. 2. Calculate Lone Oak’s cost of goods manufactured.
3. 3. Compute the company’s cost of goods sold.
4. 4. Determine net income for 20x1, assuming a 30% income tax rate.
5. 5. Determine the number of completed units manufactured during the year.
6. 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.