Fultz Company has accumulated the following budget data for the year 2017. Prepa

Question

Fultz Company has accumulated the following budget data for the year 2017.

Prepare a schedule showing the computation of cost of goods sold for 2017.

ALSO

Prepare a budgeted multiple-step income statement for 2017.

Fultz Company has accumulated the following budget data for the year 2017.

1. Sales: 31,380 units, unit selling price $90. 2. Cost of one unit of finished goods: direct materials 1 pound at $5 per pound, direct labor 3 hours at $12 per hour, and manufacturing overhead $6 per direct labor hour. 3. Inventories (raw materials only): beginning, 10,370 pounds; ending, 15,270 pounds. 4. Selling and administrative expenses: $170,000; interest expense: $30,000. 5. Income taxes: 30% of income before income taxes.

Explanation / Answer

($) ($) SALES 2824200 (31380*90) COST OF GOODS SOLD OPENING STOCK 51850 (10370*5) ADD MANUFACTURING COST DIRECT MATERIAL 156900 (31380*5) DIRECT LABOUR 1129680 (31380*3 HOURS* 12) MANUFACTURING OVERHEAD 564840 (31380*3HOUR *6) LESS CLOSING STOCK 76350 (15270*5) COST OF GOODS SOLD 1826920 LESS SELLING & ADMINISTRATIVE EXPENSE 170000 LESS INTEREST EXPENSE 30000 TOTAL INDIRECT EXPENSES 200000 PROFIT BEFORE TAX 797280 LESS TAX @ 30% 239184 PROFIT AFTER TAX 558096

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