I am having a difficult time with this income statement! QUESTION 4 Total Manufa

Question

I am having a difficult time with this income statement! QUESTION 4 Total Manufactarin labor, overhead, and other E Cost, Income Statement, Unit Cost, and Sellinng s iroveion, c consuit you rega rang a pinned'new proouet mey have escrates orthe costs or matena, mpenses for 2016but need to know ho ruch to charge for each unk to ean a profit i, 2016 equal to 15% oftheir totail long-term investment of $560,000 ignore income tase si hen plans icoke hot ehnit of t ruducs requames Direot Material 4 t of a material coengs Direct labor 2hrs af a mecal formers sme xstT5. 40 per hr oyor tems ef production overhead would be annual rent of $65.044 for a factory buding $40.124 rent for machinery, and $30,380 of indirect material Other production overhead is esinited to be 32.592 Seling expenses are an estr ated 30% of total sales, and nolacary nnistrative expenses are 20% ef total sales The consensus at innovation is thar during 2016 10.00 units of proda ct should be prodaced fer selling and another 2,000 units should be produced for the nest year's brginning inventory, Alse, an extra 3,000 pounds of material will e purchased as begining imventery for the nest year Because of the nature of the manufacturing process, al units started must be cenepleted, so work in process inventories are negigible Requireb a incorporate the above data into a schedule of estimated total manu facturing costs and compute the unit production cost for 2016 Do not use negative sigrs with any of your answers scmated Total Manufacturing Cost Year Ended Decenaer .20% birect materia Ah Beginning merls inventory cost of materials purchased 57,000 7,000 6.000 materials used 305830 Dinect materials used Direct Labor Manufactaring overhead 450.240 65044 40124 326,992 Building n Machinery ren Other factory overhead head 462140 Total mnuracturi e 1 218,000 Total manufacturing cesns Round answer to two decimal places

Explanation / Answer

Income Statement Sales 2198000 Cost of goods sold 1015000 Gross Profit on sales 1183000 Operating expenses: Selling expenses 659400 Administrative expenses 439600 1099000 Net Income 84000 Let sales be "x" Selling expenses    = 0.3x Administrative expenses   = 0.2x By condition    x   = 0.5x + 84000 + 1015000 x = (1099000/0.5)    = $2,198,000

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