Question

1. Daniels Co. produced 150,000 lamps during the past calendar year. Daniels had 2,500 floor lamps in finished goods inventory at the beginning of the year. At the end of the year, there were 11,500 floor lamps in finished goods inventory. The lamps sell for $50 each. Daniels accounting records provide the following information for the past year:

            

Purchases of direct materials	$1,675,000
Direct materials inventory, January 1	$380,000
Direct materials inventory, December 31	$327,000
Direct labor	$2,000,000
Indirect labor	$790,000
Depreciation, factory building	$1,100,000
Depreciation, factory equipment	$630,000
Property taxes on the factory	$65,000
Factory utilities	$150,000
Freight in	$1,500
Insurance on the factory	$200,000
Research and development	$120,000
Salary, sales supervisor	$85,000
Commissions, salesperson	$370,000
General administration	$390,000
Work in process inventory, January 1	$450,000
Work in process inventory, December 31	$750,000
Finished goods inventory, January 1	$1007,500
Finished goods inventory, December 31	$489,000

Required:

1. Prepare a cost of goods manufactured statement
2. Prepare an income statement
3. Compute the cost of producing one lamp in 2018

Answer 1

$1615 $1728 000 $2,000,000 Daniels Co. Cost of Goods Manufactured Direct materials inventory, January ! $380,000 Add: Puchase of direct materials Less: Direct materials used inventory, Dec 31 (8327,000) Direct materials used in the Production Dad: Direct labor Add: Manufacturing overheads: Indirect labor $790,000 Depreciation, factory building $1,100,000 Depreciation, factory equipment $630,000 Property taxes on the factory $ 65,000 Factory utilities $150,000 Freight in $1500 Insurance on the factory 3200,000 Total Manufacturing Overheads $2,936,500 Total manufacturing costs Add: Work in Process Inventory, Jan 1 Less: work in Process inventory , Dec 31 Cost of Goods Manufactured $6,664,500 $450,000 ($750,000) $6364,500 cost of Goods manufactured Add: Finished Goods inventory, Joan I Less: Finished Goods inventory, Dec 31 Cost of Goods sold $6364,500 $1,007,500 ($489,000) $6,883,000

$7,050,000 (16,883,000) $167,000 Daniels Co Income statement Sales Revenue (141,000 units + $50 each) Less: cost of Goods sold Gross Profit Less: Operating Expenses: Research and Development Salary, sales, Supervisor Commissions, Salesperson General administration Total operating Expenses Net Operating loss ($120,000) C$85,000) ($370,000) ($390,000) ($965,600) (9798,000) Cost of Goods Manufactured (a) Number of units Produced (b) Cost of Producing one lamp(alb) $6,364,500 $150,000 $42.43 Working Dotes for selling units: Beginning finished goods units Add: Units Produced during the year Less Ending Finished goods units Total units sold 2500 150,000 11,500 141000