Classify the costs listed in the previous problem as either product costs or period costs.
Good Vibrations, Inc., produces videotapes of musical performances. A newly hired executive of the company has asked you to sort through the records and prepare a statement of the company"s cost of goods manufactured. You find the following data from records prepared by Good Vibrations, Inc., for the year ended 2009 December 31:
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Inventories:
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Beginning direct materials inventory, 2009 January 1
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$6,000
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Ending direct materials inventory, 2009 December 31
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10,500
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Beginning work in process inventory, 2009 January 1
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10,000
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Ending work in process inventory, 2009 December 31
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9,500
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Materials purchases
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50,000
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Direct labor
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40,000
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Indirect labor
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15,000
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Factory utilities expense
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7,000
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Factory supplies expense
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5,000
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Depreciation expense - factory building
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14,000
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Depreciation expense - Factory Equipment
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10,500
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Other manufacturing overhead
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25,000
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You also learn that beginning Finished Goods Inventory on 2009 January 1, was USD 20,000 and ending Finished Goods Inventory on 2009 December 31, was USD 5,000. Sales for the year were USD 400,000. Selling expenses were USD 50,000 and administrative expenses were USD 75,000.
a. Prepare a statement of cost of goods manufactured for Good Vibrations, Inc., for the year ended 2009 December 31.
b. Prepare an income statement for Good Vibrations, Inc., for the year ended 2009 December 31.