The Shiawassee Company is a small start-up company in its second year of business that manufacturers hand woven sweaters in the colors of the local university. As the owner-manager, you are preparing the income statement for fiscal year ended (FYE) 12-31-2015. The following data are available from the accounting records: Raw materials inventory was $11,000 as of December 31, 2014 and $6,500 as of December 31, 2015. Work-in-process inventory was $0 as of December 31, 2014 and $3,500 as of December 31, 2015. Finished goods inventory was $0 as of December 31, 2014 and $4,000 as of December 31, 2015.
Analyze the data for FY 2015 and answer the questions that follow:
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Utilities for plant
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$4,300
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Delivery expense
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$2,500
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Sales salaries expense
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$4,400
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Plant janitorial services
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$1,550
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Sales revenue
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$109,700
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Customer service hotline expense
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$1,700
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Direct labor
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$20,500
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Direct materials purchases
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$34,000
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Rent on manufacturing plant
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$9,700
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1. What is the amount of the company's direct materials used for the year ended December 31, 2015?
2. What is the company's total manufacturing overhead for the year ended December 31, 2015?
3. What is the company's cost of goods sold for the year ended December 31, 2015?
4. What is the company's net operating income for the year ended December 31, 2015?
5. Suppose there was an error in counting and costing out work-in-process inventory as of December 31, 2015 (not 2014) and it really should have been $4,500. What is the correct amount of the company's net operating income for the year-ended December 31, 2015?