Exercise 21-13 Fultz Company has accumulated the following budget data for the y

Question

Exercise 21-13

Fultz Company has accumulated the following budget data for the year 2017.

Prepare a budgeted multiple-step income statement for 2017.

1. Sales: 31,490 units, unit selling price $87. 2. Cost of one unit of finished goods: direct materials 1 pound at $5 per pound, direct labor 3 hours at $13 per hour, and manufacturing overhead $8 per direct labor hour. 3. Inventories (raw materials only): beginning, 10,480 pounds; ending, 15,420 pounds. 4. Selling and administrative expenses: $170,000; interest expense: $30,000. 5. Income taxes: 30% of income before income taxes.

Explanation / Answer

Budgeted Income Statement W/Note For Cost of Goods Sold For the year Dec31,2017 Detail Amount Sales (31490*$87) $2,739,630.00 Direct Material (1 Pound*$5) $5 Less: COGS (31490*$68) $2,141,320.00 Direct Labour (3 Hour*$13) $39 Gross profit $598,310.00 Manufacturing Overhead (3Hour*$8) $24 Less: Operating Expense Cost of Good Sold Per Unit $68 Selling& Administrative   Expense -$170,000.00 Income From Operation $428,310.00 Less: Non Operative Expense interest Expense -$30,000.00 Income Before Tax $370,000.00 Less: Tax @ 30% -$111,000.00 Income after Tax $259,000.00

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