Fultz Company has accumulated the following budget data for the year 2017. Sales
ID: 2482530 • Letter: F
Question
Fultz Company has accumulated the following budget data for the year 2017. Sales: 31,360 units, unit selling price $87. Cost of one unit of finished goods: direct materials 1 pound at $5 per pound, direct labor 3 hours at $13 per hour, and manufacturing overhead $8 per direct labor hour. Inventories (raw materials only): beginning, 10,360 pounds; ending, 15,500 pounds. Selling and administrative expenses: S170.000; interest expense: 530,000. Income taxes: 30% of income before income taxes. Prepare a schedule showing the computation of cost of goods sold for 2017. Prepare a budgeted multiple-step income statement for 2017.Explanation / Answer
FULTZ Company
Computation of Cost of goods sold:
Cost of one unit of Finished Goods:
Direct material 5
Direct labor 13
Manufacturing overhead 8
26
FULTZ Company
Income statement
Sales [ 31360 * 87 ] 2728320
COGS [ 31360 * 26 ] (815360)
Gross profit 1912960
Selling & administrative expenses (170000)
Net operating income 1742960
Interest (30000)
EBT 1712960
Tax (513888)
Net income 1199073.
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