Question

Only 13 Income Statement Entries

he is a designer, maracure and distributor of custom gourmet kitchen knives. A new kitchen Knife series called the Kitchen Ninja was released for production in early 20va in the company spent 5000,000 to develop a late night advertising infomercial for the new product. During 2018, the company spent an additional $1,400,000 promoting the product through these infomercia 800.000 in legal costs. The knives were ready for manufacture on January 1 2018 Groceras de coser to some cost e d with the then Nina Ke The unit direct materials cost for the knife is 5400 used for that and blade) Wood for handie) The production process is The a g toward. First, the hardened steel bians, which we purchased rectly from a m requires one hour wr250 kn o re stamped into f i n d e At there wamped they brought to an assembly where the head to he a d to a decorative box There arcot 100 com production 1.200.000 unts during the year. Other information is as follows 00.000 120.000

Answer 1

Income statement more Answer: & preparation of Ginocera. Inc Income statement for the year ended Dec 31, 2018. particulars - Amount Amount $17.920,000 sales [1180,000 * $16] Leset Cost goods sold [120,000x $9.70] $10,864.000 - Gross profit $7,056.000 selling aud Administrative expenses :- Selling expenses:- Infomerical campaign $2,000,000 $ 600,000+!409.000] promotional materials [80,000x $ 607 Shipping expenses 1,120,000x4220] $ 224,000 $3,600,000 Total Selling expenses $ 5824,000 Administrative expenses Legal expenses $ 800,000 Total operating capenses 66,624000) $432,000 Income from operations working Note: manu facturing cost per unit: particulars Jamount Amount Direct materials, Hardened steel blanks $4 wood 1$ 1.50 $0.50 Total Direct Materials Direct Laboy Factory overhead Total Manufaclenting cost- $9.70 packaging § 6 $0.50 $ 3.20

Factory Overhead perunit = Factory overhead cost applied samping machine stamping Machine perhour. = $300/250 perhour : Faelory Overhead perunit = $3.20. percenit. 2) Caleulation of the balances for work in process and finished goodbye a) Balance for work in process: Balance for working process = Additional stamped knives x Goal direct materials per unit + Factory overhead per unit) 25000 units x ($6.+ $3.20) - 25000* $9.9 : $230000 :: The Balance for work in process is $230,000. 6) Calculation of the balances for finished goods:- - particulars Unils Total completed production during year 120,0000 Less Number of cenils sold 1120 000 Balance units 80,000 Manufacturing cost percenit &9.70 finished goods 80000 x $9.70] $776000 Amount .: Balance finished goods is $776.000.