Papyrus Corp manufactures several products. Papyrus Corp has gathered the follow

Question

Papyrus Corp manufactures several products. Papyrus Corp has gathered the following information for the year ended December 31, 2014.

Sales                                                    $110,000

Direct Materials Used                         $10,700

Fixed indirect production costs           $10,900

Variable Indirect Production Costs     $7,900

Fixed direct labor                                $10,300

Variable Direct Labor                          $12,300

Fixed Selling Expenses                       $33,040

Variable Selling Expenses                   $3,440

Finished Goods Inventory, Jan 1        $24,000

Finished Goods Inventory, Dec 31     $22,000

WIP Inventory, Jan 1, 2014                $0

WIP Inventory, Dec 31, 2014             $0

Requirements:

Compute the Cost of Goods Manufactured for the year ended Dec 31, 2014.

Compute the Cost of Goods Sold for the year ended December 31, 2014.

Compute the Net Income for the year ended December 31, 2014.

Explanation / Answer

a Direct Materials Used 10700 Direct labor 22600 Indirect Production Costs 18800 Total manufacturing costs 52100 Add:WIP Inventory, Jan 1, 2014   0 Total cost of work in process 52100 Less: WIP Inventory, Dec 31, 2014 0 Cost of Goods Manufactured 52100 b Finished Goods Inventory, Jan 1   24000 Add:Cost of Goods Manufactured 52100 Cost of goods available for sale 76100 Less: Finished Goods Inventory, Dec 31 22000 Cost of Goods Sold 54100 c Sales 110000 Cost of Goods Sold 54100 Gross Margin 55900 Less: Selling Expenses 36480 Net Income 19420

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