Questions:
Cost of goods manufactured, cost of goods sold, and income statement Gravois, Inc., incurred the following costs during June:
|
Selling expenses
|
$158,375
|
|
Direct labor
|
283,140
|
|
Interest expense
|
41,065
|
|
Manufacturing overhead, actual.
|
204,750
|
|
Raw materials used
|
460,980
|
|
Administrative expenses
|
123,000
|
Required:
During the month, 19,500 units of product were manufactured and 11,000 units of product were sold. On June 1, Gravois, Inc., carried no inventories. On June 30, there were no inventories for raw materials or work in process.
a. Calculate the cost of goods manufactured during June and the average cost per unit of product manufactured.
b. Calculate the cost of goods sold during June.
c. Calculate the difference between cost of goods manufactured and cost of goods sold. How will this amount be reported in the financial statements?
d. (Optional) Prepare a traditional (absorption) income statement for Gravois, Inc., for the month of June. Assume that sales for the month were $1,035,000 and the company's effective income tax rate was 35%.