Can you check income statement of this problem? I am not sure what is all these
ID: 2596866 • Letter: C
Question
Can you check income statement of this problem? I am not sure what is all these cost categorize under. I put under in cost of goods but maybe not right?Thank you! Power-To-Spare, Inc. makes a smartphone case that includes a battery that extends the operating life of an iPhone. The manufacturing costs per unit include $15 direct materials, $17 direct labor, and $8 manufacturing overhead. These costs are based on a production and sales volume of 4,000 units. Advertising costs amounted to $25,000. Research and development cost for the materials used in the phone cases amounted $30,000. Companywide administrative costs amounted to $45,000. Fashion design costs amounted to $20,000 Power-To-Spare's management team established the sales price at 150 percent of GAAP defined product cost Required a. Determine the total amount of upstream costs b. Determine the total amount of downstream cost c. Determine the total amount of midstream cost d. Determine the sales price per unit re a GAAP.based income statement
Explanation / Answer
For research and development we can use upstream cost, since this is related to the development of the product.
For fashion design and advertising costs we can use downstream cost as this is the cost incurred for the activities after the production.
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