Types of Costs, Cost of Goods Manufactured, Absorption-Costing IncomeStatement
Palmer Manufacturing produces weather vanes. For the year just ended, Palmer produced10,000 weather vanes with the following total costs:
|
Direct Materials
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$ 20,000
|
|
Direct Labor
|
35,000
|
|
Overhead
|
10,000
|
|
Selling expenses
|
6,250
|
|
Administrative expenses
|
14,400
|
During the year, Palmer sold 9,800 units for $12 each. Beginning finished goods inventoryconsisted of 630 units with a total cost of $4,095. There were no beginning or endinginventories of work in process.
Required:
1. Calculate the unit costs for the following: direct materials, direct labour, overhead,prime cost, and conversion cost.
2. Prepare schedules for cost of goods manufactured and cost of goods sold.
3. Prepare an absorption-costing income statement for Palmer Manufacturing.