Salaries expense Customer service expense Cost of goods manufactured Cost of goo
ID: 2611565 • Letter: S
Question
Salaries expense Customer service expense Cost of goods manufactured Cost of goods sold Problem 6. (5 points) Match the following terms with the examples given below for a publishing be used more than once. company. Terms may A. Direct materials B. Indirect materials C. Indirect labor D. Direct labor E. Other manufacturing costs Depreciation on equipment Glue for book bindings Property taxes on manufacturing plant Book covers Machine operators' wages Plant supervisor's salary Problem 7. (15 points) Perform a vertical analysis for 2007 for the following income statement. 200 $557,000 $500,00 200 Percen Account Net sales revenue 295 00oExplanation / Answer
Problem-6;
Depreciation on equipment
(E). Other manufacturing costs
Glue for book bindings
(A). Direct materials
Property taxes on manufacturing plant
(E). Other manufacturing costs
Book covers
(A). Direct materials
Machine operators’ wages
(D). Direct labor
Plant supervisor’s salary
(C). Indirect labor
Problem-7;
Note: As per information given in your income statement. Some calculation was incorrect like gross profit, income before tax because when you will deduct cost of goods sold from net sales revenue then you will find following amount that I have done in following income statement.
Account
2007
Percent
2006
Percent
Net sales revenue
$557000
100%
$500000
100%
Cost of goods sold
$300000
53.86%
$295000
59%
Gross profit
$257000
46.14%
$205000
41%
Selling and general expenses
$70000
12.57%
$50000
10%
Net income before tax
$187000
33.57%
$155000
31%
Income tax expense
$24000
4.31%
$16500
3.3%
Net income
$163000
29.26%
$138500
27.7%
Working note;
Formula for calculating percent is as follow;
(Particular item * 100) / Net sales revenue
Depreciation on equipment
(E). Other manufacturing costs
Glue for book bindings
(A). Direct materials
Property taxes on manufacturing plant
(E). Other manufacturing costs
Book covers
(A). Direct materials
Machine operators’ wages
(D). Direct labor
Plant supervisor’s salary
(C). Indirect labor
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