Kason, Inc., expects to sell 20,000 pool cues for $12.00 each. Direct materials

Question

Kason, Inc., expects to sell 20,000 pool cues for $12.00 each. Direct materials costs are $2.00, direct manufacturing labor is $4.00, and manufacturing overhead is $0.80 per pool cue. The following inventory levels apply to 2016:

                                                   Beginning inventory          Ending inventory

                                                             Direct materials                    24,000 units        24,000 units

                                        Work-in-process inventory                               0 units        0 units

                                           Finished goods inventory                       2,000 units        2,500 units

On the 2016 budgeted income statement, what amount will be reported for cost of goods sold?

$139,800

$136,000

$132,600

$153,000

Explanation / Answer

Direct materials $2/unit X 20,000 units $40,000 Direct labor $4/unit X 20,000 units 80,000 Manufacturing overhead $0.8/unit X 20,000 units 16,000 Cost of goods sold $136,000

Related Questions

Navigate

• Browse (All)
• Browse K
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.