Question

Exercise 9-13 (Video) Fultz Company has accumulated the following budget data for the year 2020. 1. Sales: 31,410 units, unit selling price $89. 2. Cost of one unit of finished goods: direct materials 1 pound at $5 per pound, direct labor 3 hours at $12 per hour, and manufacturing overhead $8 per direct labor hour. 3. Inventories (raw materials only): beginning, 10,240 pounds; ending, 15,220 pounds. 4. Selling and administrative expenses: $170,000; interest expense: $30,000. 5. Income taxes: 30% of income before income taxes.

Prepare a schedule showing the computation of cost of goods sold for 2020. FULTZ COMPANY Computation of Cost of Goods Sold December 31, 2020For the Quarter Ending December 31, 2020For the Year Ending December 31, 2020 Cost of one unit of finished goods:     Direct materials $     Direct labor     Manufacturing overhead           Total $ Cost of Goods Sold $

Prepare a budgeted multiple-step income statement for 2020. FULTZ COMPANY Budgeted Income Statement December 31, 2020For the Year Ending December 31, 2020For the Quarter Ending December 31, 2020 Operating ExpensesIncome from OperationsTotal Operating ExpensesIncome Tax ExpenseIncome before Income TaxesNet Income / (Loss)Beginning InventoryGross ProfitPurchasesSalesSelling and Administrative ExpensesCost of Goods SoldEnding Inventory $ Income from OperationsOperating ExpensesIncome Tax ExpenseNet Income / (Loss)Cost of Goods SoldSalesTotal Operating ExpensesBeginning InventorySelling and Administrative ExpensesIncome before Income TaxesEnding InventoryPurchasesGross Profit SalesNet Income / (Loss)Operating ExpensesSelling and Administrative ExpensesTotal Operating ExpensesCost of Goods SoldPurchasesBeginning InventoryEnding InventoryIncome before Income TaxesGross ProfitIncome from OperationsIncome Tax Expense Ending InventorySelling and Administrative ExpensesBeginning InventoryIncome Tax ExpenseCost of Goods SoldTotal Operating ExpensesSalesPurchasesIncome before Income TaxesGross ProfitNet Income / (Loss)Income from OperationsOperating Expenses Income before Income TaxesIncome from OperationsBeginning InventoryIncome Tax ExpenseNet Income / (Loss)Ending InventoryGross ProfitPurchasesOperating ExpensesSelling and Administrative ExpensesSalesTotal Operating ExpensesCost of Goods Sold Interest ExpensePurchasesGross ProfitIncome before Income TaxesIncome Tax ExpenseBeginning InventorySelling and Administrative ExpensesTotal Operating ExpensesEnding InventoryNet Income / (Loss)Income from OperationsSalesCost of Goods Sold Cost of Goods SoldGross ProfitIncome from OperationsBeginning InventorySalesEnding InventoryIncome Tax ExpenseIncome before Income TaxesNet Income / (Loss)PurchasesOperating ExpensesTotal Operating ExpensesSelling and Administrative Expenses Gross ProfitPurchasesSalesNet Income / (Loss)Selling and Administrative ExpensesIncome before Income TaxesIncome Tax ExpenseOperating ExpensesCost of Goods SoldTotal Operating ExpensesBeginning InventoryEnding InventoryIncome from Operations Total Operating ExpensesGross ProfitBeginning InventoryIncome before Income TaxesNet Income / (Loss)Operating ExpensesPurchasesCost of Goods SoldSalesEnding InventoryIncome from OperationsIncome Tax ExpenseSelling and Administrative Expenses $

Answer 1

FULTZ COMPANY
Computation of cost of goods sold
For the year ending December 31, 2020
Cost of one unit of finished goods:
Direct materials	$ 5
Direct labor (3x$12)	$ 36
Manufacturing overhead ($8x 3 hrs)	$ 24
Total	$ 65
Cost of goods sold (31,410 x$65)	$ 2,041,650

FULTZ COMPANY
Budgeted income statement
For the year ending December 31, 2020
Sales (31,410 x $89)	$ 2,795,490
Less: Cost of goods sold	$ 2,041,650
Gross profit	$ 753,840
Less: Selling and administrative expense	$ 170,000
Income from operations	$ 583,840
Less: Interest expense	$ 30,000
Income before income taxes	$ 553,840
Less: Income tax expenses @ 30%	$ 166,152
Net income	$ 387,688