Alhambra Aluminum Company, a manufacturer of recyclable soda cans, had the following inventory balances at the beginning and end of 20×1.
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Inventory Classification Raw material . . . . . . . . . . . . . . . . . . . . . |
January 1, 20×1 $ 55,000 . . . . . . . . . . . . |
December 31, 20×1 $ 75,000 |
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Work in process . . . . . . . . . . . . . . . . . . . |
110,000 . . . . . . . . . . . . |
125,000 |
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Finished goods . . . . . . . . . . . . . . . . . . . . |
160,000 . . . . . . . . . . . . |
155,000 |
During 20×1, the company purchased $240,000 of raw material and spent $420,000 for direct labor. Manufacturing overhead costs were as follows:
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Indirect material . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
$ 12,000 |
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Indirect labor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
22,000 |
|
Depreciation on plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
110,000 |
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Utilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
23,000 |
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Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
35,000 |
Sales revenue was $1,210,000 for the year. Selling and administrative expenses for the year amounted to
$105,000. The firm’s tax rate is 35 percent.
Required:
1. Prepare a schedule of cost of goods manufactured.
2. Prepare a schedule of cost of goods sold.
3. Prepare an income statement.
4. Build a spreadsheet:Construct an Excel spreadsheet to solve all of the preceding requirements. Show how both cost schedules and the income statement will change if the following data change: direct labor is $410,000 and utilities cost $24,000.
