Turbo Company, a manufacturing firm, produces a single product. Assume all raw m

Question

Turbo Company, a manufacturing firm, produces a single product. Assume all raw materials are direct materials (no indirect materials). The following information has been taken from the company's production, sales, and cost records for the just completed year: The finished goods inventory is being carried at the average unit production cost for the year. The selling price of the product is $25 per unit. Compute the cost of goods manufactured for the year. Compute the following: The number of units in the finished goods inventory at the end of the year. The cost of the units in the finished goods inventory at the end of the year. Prepare an income statement for the year.

Explanation / Answer

Details Amount Amount Ans 1 Rawmaterial Purchase 1,60,000.00 Add: Opeining Inventory      20,000.00 Less: Closing Inventory    -10,000.00 Rawmaterial Consumed 1,70,000.00 Direct Labor      80,000.00 Prime Cost 2,50,000.00 Factory OH Indirect Labour      60,000.00 Building Rent      40,000.00 Utilities,Factories      35,000.00 Royalty (30000*1)      30,000.00 Factory maintenance      25,000.00 Special Equipment Rent (6000+30000*.1)        9,000.00 Other Factory OH      11,000.00 Manufacturing OH 2,10,000.00 Cost of Manufacture 4,60,000.00 Add: Beginning WIP      30,000.00 Less:Ending WIP    -40,000.00 Cost of Goods Manufactured 4,50,000.00 Total Production      30,000.00 Cost Per Unit              15.00 Sales in Units Sales value 6,50,000.00 Sales Price Per Unit              25.00 Sales in Units      26,000.00 Production Units      30,000.00 Less Sales units    -26,000.00 Ans 2 a Closing Stock        4,000.00 Cost per Unit              15.00 Ans 2 b Closing Stock Cost      60,000.00 Ans Details Amount Amount Ans 3 Sales 6,50,000.00 Less COGS 4,50,000.00 Gross Profit 2,00,000.00 Advertisement Expenses      50,000.00 Selling and Admin Expenses 140000+20000+50000*.20 1,70,000.00 2,20,000.00 Net Profit(Loss)    -20,000.00

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