Fultz Company has accumulated the following budget data for the year 2017 1. Sal

Question

Fultz Company has accumulated the following budget data for the year 2017 1. Sales: 30,000 units, unit selling price $85 2. Cost of one unit of finished goods: direct materials 1 pound at $5 per pound, direct labor 3 hours at $15 per hour, and manufacturing overhead $5 per direct labor 3. Inventories (raw materials only): beginning, 10,000 pounds; ending, 15,000 pounds. 4. Selling and administrative expenses: $170,000; interest expense: $30,000. hour. Income taxes: 30% of income before income taxes. (a) Prepare a schedule showing the computation of cost of goods sold for 2017 FULTZ COMPANY Computation of Cost of Goods Sold Cost of one unit of finished goods: Direct materials Direct labor Manufacturing overhead Total Cost of Goods Sold

Explanation / Answer

(a)

FULTZ COMANY

Computation of Cost of Goods Sold

For the Year Ending December 31, 2017

Cost of one unit of finished goods: Direct materials (1 × $5) $5 Direct labor (3 × $15) $45 Manufacturing overhead (3 × $5) $15 Total $65 Cost of Goods Sold(30,000 units × $65) $1,950,000

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