Question

Fultz Company has accumulated the following budget data for the year 2020.

1. Sales: 31,230 units, unit selling price $89.
2. Cost of one unit of finished goods: direct materials 1 pound at $6 per pound, direct labor 3 hours at $13 per hour, and manufacturing overhead $7 per direct labor hour.
3. Inventories (raw materials only): beginning, 10,170 pounds; ending, 15,490 pounds.
4. Selling and administrative expenses: $170,000; interest expense: $30,000.
5. Income taxes: 30% of income before income taxes.
Prepare a budgeted multiple-step income statement for 2020.

Answer 1

Fultz Company

Budgeted multiple-step income statement for 2020.

Sales ( 31,230 units x $89) $2,779,470

Less Cost of Sales ($138,320)

Gross Profit

Less Expenses :

Operating Expenses

Selling and administrative expenses: $170,000

Operating Profit

Non - Operating Expenses

Interest ($30,000)

Income before income taxes.

Income tax expense at 30%

Net Income

Step-by-step explanation:

Cost of Goods Manufactured Calculation :

Materials = 5,320 x 6 = $31,920

Direct Labor = 5,320 x $13 = $69,160

Manufacturing Overhead = $37,290

Total $138,320