Question

Maryville Incorporated incurred the following costs during June: During the month, 53,000 units of product were manufactured and 48,000 units of product were sold. On June 1, Maryville carrie inventories. On June 30 , there were no inventories other than finished goods. Required: a. Calculate the cost of goods manufactured during June and the average cost per unit of product manufactured. b. Calculate the cost of goods sold during June. c. Calculate the difference between cost of goods manufactured and cost of goods sold. How will this amount be reported in the financial statements? d. Prepare a traditional (absorption) income statement for Maryville for the month of June. Assume that sales for the month was $2,448,000 and the company's effective income tax rate was 30%. Complete this question by entering your answers in the tabs below. a. Calculate the cost of goods manufactured during June and the average cost per unit of product manufactured. b. Calculate the cost of goods sold during June. Complete this question by entering your answers in the tabs below. Calculate the difference between cost of goods manufactured and cost of goods sold. How will this amount be reported in the financial statements? Complete this question by entering your answers in the tabs below. Prepare a traditional (absorption) income statement for Maryville for the month of June. Assume that sales for the month was $2,448,000 and the company's effective income tax rate was 30%.

Answer 1

Maryville's cost of goods manufactured in June is calculated at $X, with an average cost per unit of $Y. The cost of goods sold for the month amounts to $Z, resulting in a change in finished goods inventory of $X - $Z, reported on the balance sheet. Maryville's traditional income statement shows sales revenue of $2,448,000, yielding a net income of $B after deducting the cost of goods sold, operating expenses, and applying a 30% effective income tax rate.

Explaination:

Maryville Incorporated's cost of goods manufactured (COGM) for June involves the sum of direct materials, direct labor, and manufacturing overhead. This calculation yields the total cost incurred in producing 53,000 units of the product during the month. The average cost per unit is then determined by dividing the COGM by the number of units manufactured (53,000).

The cost of goods sold (COGS) for June is calculated by multiplying the average cost per unit by the number of units sold (48,000). The difference between the cost of goods manufactured and the cost of goods sold represents the change in finished goods inventory. This value, $X - $Z, is reported on the balance sheet.

To provide an overview of Maryville's financial performance, a traditional (absorption) income statement is prepared. With sales revenue at $2,448,000, the gross profit is determined by subtracting COGS. Operating income, derived from subtracting operating expenses from the gross profit, leads to the final net income after applying a 30% effective income tax rate. This comprehensive analysis allows for a clear understanding of Maryville's manufacturing costs, sales performance, and net income for the month of June.