Question

eekay Company was organlzed on November 1 of the prevlous year. After seven months of start-up losses, management had expected to earn a profit during June, the most recent month. Management was disappolnted, however, when the Income statement or June also showed a loss. June's Income statement follows: VEEKAY COMPANY Incone Statenent For the Month Ended June 38 Sales $ 742,588 Less operating expenses: Selling and administrative salaries Rent on facilities Purchases of raw materials Insurance Depreciation, sales equipment Utilities costs Indirect labour Direct Labour Depreciation, factory equipnent Maintenance, factory Advertising $ 43,488 51,808 242,888 11,198 12,658 63,888 127,800 186,780 15,288 9,188 94,608 777,358 Operating loss (34,858) After seeing the $34.850 loss for June, Veekay's president stated, 비 was sure we'd be profitable within six months, but after eight months we're stll spilling red Ink. Maybe it's time for us to throw In the towel.To make maters worse, I Just heard that Debbie won't be ack from her surgery for at least slx more weeks. Debble is the company's ccntroller, In her absence, the statement above was prepared by a new assistant who has had Iittle xperience In manufacturing operations. Additional Information about the company follows: 코 Only 85% of the rent on fac lities applies to factory operations; the remainder applies to selling and administrative activities. b. Inventory balances at the beginning and end of June were as follos: Raw nater ials Hork in process Finished goods June 1 June 3e $20,1e0 $78,65 $97,85e $23,320 $50,950 $72,27e Some 90% of the insurance and 80% of the utilities cost apply to factory operations; the remaining am ounts apply to selling and

1. As one step in gathering data for a recommendation to the president, prepare a schedule of cost of goods manufactured for June.

Answer 1

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