Question

Add to a creation Edit & Create Sha ing calendar year enmcnitaken from the December 31,2015,adjusted tral halance Prot The und other records of Best Bikes. lem 18-28 Classifying costs C2 C3 20,250 Miscellaneous production costs 8.440 Office salaries expense 10,125 Raw materis/s purchases 35.400 Rent expense-Office space 21.500 Rent expense-Seling space 6,060 Rent expense-Factory bu lding 37,500 aintenance experise- Factory equpmene 562.500V Sales 59.000. Sales salaries expense Advertising oxpense expense-Office equipment8 Degreciation expense Selling equipment Depreciation expense- -Factory squipmene Factory supervision actory supplies used Factory utilities 8,440 0,875 894,375 23.625 7,000 93,500 10,375 4,942.625 hdrect labor 295.300 and classify cach of the costs above as either a product or period cost cach of the product costs as either direct materials, direct labor, or fuctory overhead 2 Classity Clasify cach of the period costs as either selling or general and administrative expenses Lsing the information from Problem 18-2B and the inventory information for Rest Rikes below, complete Problem 18-38 c requirements below. Assume income tax expense is $136,700 for the year Schedule of cost of goods manufactured and incame statement analysis of inventories P2 AT nventories Raw materialhs, December 31, 2014 s 40,375 Raw materials, December 31, 2015 Work in process, December 31,2014 Work in process, December 31, 2015 Finished goods, December 31, 2014 Finished goods. December 31, 2015 70,430 2,500 14,I00 141,750 Required 1 Prepare the company's 2015 schedule of cost of goods manufactured 2 Prepare the company's 2015 income statement that reports separate categories for (a) selling expenses Check d s and th) general and administrative expenses. ) days' sales in inventory, defined as 365 times ending inventory divided by cost of goods sold, for ー11. taw malenals inventory and its finished goods inventory. (TO compuie turnover and days sales h imventory for raw materials, use raw materials used rather than cost of goods sold.) Discuss soinde peshle reasons for differences between these ratios for the two types of inventories Round answers a. Compute the (a) inventory turnover, defined as cost of goods sold divided by average inventory, and ti onc decamal place

problem 18-3b

Answer 1

Cost of goods manufactured
Beginning Inventory ofWIP				12500
Current cost of manufacturing:
Beginning Inventory of RM		40375
Add: Purchases		894375
Total goods available		934750
Less: Endding inventory of RM		70430
Ra wmaterial consumed			864320
Direct wages			62500
manufacturing overheads
Depreciation		35400
Factory supervision		121500
Factory supplies		6060
Fcatory utilities		37500
Indirect labor		59000
Misc production cost		8440
Rent expenses		93500
Maintenance expenses		30375
Manufacturing overheeads			391775
Total current cost of manufacturing				1318595
Total cost of goods manufacturing				1331095
Less: Ending inventory of WIP				14100
Cost of goods manufactured				1316995
Income statement
Sales revenue				4942625
Less: Cost of goods soldd
Beginning inventory of FG			177200
Aadd: cost of goods manufactured			1316995
Total cost of goods available ffor sale			1494195
Less: Ending inentory of FG			141750
Cost of goods sold				1352445
Gross margin				3590180
Less: Expenses
Selling expenses
Depreciation-Selling equip			10125
Advertisement			20250
Rent expenses			27000
sales salaries			295300
Total Selling expenses				352675
Admin expense
Depreciation			8440
office salaries			70875
Rent expenses			23625
Total admin expenses				102940
Net income				3134565