COST OF GOODS MANUFACTURED, INCOME STATEMENT
Paulisse Company produces hand lotion for resale by discount chains. For last year, Paulisse reported the following:
|
Work-in-process inventory, January 1
|
$13,250
|
|
Work-in-process inventory, December 31
|
28,250
|
|
Finished goods inventory, January 1
|
113,000
|
|
Finished goods inventory, December 31
|
85,000
|
|
Direct materials inventory, January 1
|
16,200
|
|
Direct materials inventory, December 31
|
10,700
|
|
Direct materials used
|
170,200
|
|
Direct labour
|
72,000
|
|
Plant depreciation
|
9,500
|
|
Salary, production supervisor
|
45,000
|
|
Indirect labour
|
40,600
|
|
Utilities, factory
|
5,700
|
|
Sales commissions
|
40,000
|
|
Salary, sales supervisor
|
75,000
|
|
Depreciation, factory equipment
|
25,000
|
|
Administrative expenses
|
162,000
|
|
Supplies (40% used in the factory, 60% used in the sales office)
|
8,000
|
Last year, Paulisse produced 230,000 units and sold 250,000 units at $4 per unit.
Required:
1. Prepare a statement of cost of goods manufactured.
2. Prepare an absorption-costing income statement.