Question 24 Pultz Company has accumulated the following budget data for the year

Question

Question 24 Pultz Company has accumulated the following budget data for the year 2017 1 Sales: 31,100 units, unit selling price $85 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 $6 per direct labor hour. 3. Inventories (rew materials only): beginning, 10,100 pounds; ending, 15,100 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 2017. FULTZ COMPANY of Cost of Goods Sold Cost of one unit of finished goods: Direct materials Direct labor Manufacturing overhead Total Cost of Goods Seld Prepare a budgeted multiple-step income statement for 2017 FULTZ COMPANY

Explanation / Answer

Cost of one unit of finished goods: Amount Direct material- 1 * 5                       5 Direct labor - 3 * 12                     36 Overhead - 3 * 6                     18 Total                     59 Cost of goods sold - 31100*59        18,34,900 Budgeted income statement Amount Sales - 31100 * 85        26,43,500 Cost of goods sold        18,34,900 Gross profit          8,08,600 Selling expenses          1,70,000 Profit before interest and tax          6,38,600 Interest             30,000 Profit before tax          6,08,600 Tax - 608,600 * 30%          1,82,580 Profit after tax          4,26,020

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