Problem:
San Ysidro Company manufactures hiking equipment. The company's administrative and manufacturing operations share the company's one building. Eighty percent (80%) of the building is used for manufacturing and the remainder is used for administrative activities. Indirect labor is 8% of direct labor.
The cost accountant at San Ysidro has complied the following information for the year ended December 31:
1 Administrative salaries $192,000.00
2 Attorney fees to settle zoning dispute 22,960.00
3 Building depreciation (manufacturing portion only) 181,440.00
4 Cost of goods manufactured 2,776,760.00
5 Direct materials inventory, December 31 248,000.00
6 Direct materials purchased during the year 1,008,000.00
7 Direct materials used 1,069,880.00
8 Distribution costs 4,480.00
9 Finished goods inventory, January 1 224,000.00
10 Finished goods inventory, December 31 252,000.00
11 Insurance (on plant machinery) 53,200.00
12 Maintenance (on plant machinery) 33,880.00
13 Marketing costs 103,600.00
14 Other plants costs 82,160.00
15 Plant utilities 104,160.00
16 Sales revenue 4,550,000.00
17 Taxes on manufacturing property 38,800.00
18 Total (direct and indirect) labor 1,209,600.00
19 Work-in-process inventory, January 1 72,520.00
20 Work-in-process inventory, December 31 68,880.00
Required to do:
Prepare a cost of goods manufactured and sold statement and an income statement.