Question

Prime Cost, Conversion Cost, Preparation of Income Statement: Manufacturing Firm Kildeer Company makes easels for artists. During the last calendar year, a total of 32,000 easels were made, and 33,000 were sold for $56 each. The actual unit cost is as follows: Direct materials $13.00 Direct labor 5.00 Variable overhead 8.00 Fixed overhead 16.00 Total unit cost $42.00 The selling expenses consisted of a commission of $1.10 per unit sold and advertising co-payments totaling $93,500. Administrative expenses, all fixed, equaled $176,000. There were no beginning and ending work-in-process inventories. Beginning finished goods inventory was $155,400 for 3,700 easels.Required:1. Calculate the number and the dollar value of easels in ending finished goods inventory.Ending units Dollar amount $FeedbackRemember that cost of goods manufactured increases finished goods inventory.2. Prepare a cost of goods sold statement.Kildeer CompanyStatement of Cost of Goods SoldFor the Year Ended December 31Cost of goods manufactured $Add: Beginning finished goods inventory Cost of goods available for sale $Less: Ending finished goods inventory Cost of goods sold $

Answer 1

The number of easels in the ending finished goods inventory is 2,700 easels and the dollar value is $113,400. The cost of goods sold is $42,018.00.

Step-by-step explanation:

To calculate the number and dollar value of easels in ending finished goods inventory, we need to subtract the number and value of easels sold from the beginning finished goods inventory. We know that the beginning finished goods inventory was $155,400 for 3,700 easels. Since 33,000 easels were sold, the ending finished goods inventory can be calculated as:

Ending units = Beginning units + Units produced - Units sold

Dollar amount = Ending units * Unit cost

By substituting the given values, the number of easels in the ending finished goods inventory is 3,700 + 32,000 - 33,000 = 2,700 easels and the dollar value is $42 * 2,700 = $113,400.

1. To prepare a cost of goods sold statement, we need to calculate the cost of goods manufactured. This can be done by subtracting the fixed overhead and variable overhead from the total unit cost. Given that the total unit cost is $42.00, fixed overhead is $16.00, and variable overhead is $8.00, the cost of goods manufactured is $42.00 - $16.00 - $8.00 = $18.00.
2. Next, we need to calculate the cost of goods available for sale by adding the cost of goods manufactured to the beginning finished goods inventory. Using the given values, the cost of goods available for sale is $18.00 + $155,400 = $155,418.00.
3. Finally, to calculate the cost of goods sold, we can subtract the ending finished goods inventory from the cost of goods available for sale. Substituting the values, the cost of goods sold is $155,418.00 - $113,400 = $42,018.00.

Answer 2

Results are below.

Step-by-step explanation:

First, we need to calculate the unitary production cost:

Direct materials= 13

Direct labor= 5

Variable overhead= 8

Fixed overhead= 16

Total unit cost= $42

Now, the ending inventory in units and cost:

Beginning inventory= 3,700

Production= 32,000

Sales= (33,000)

Ending inventory in units= 2,700

Ending inventory value= 2,700*42= $113,400

Finally, the cost of goods sold:

COGS= beginning finished inventory + cost of goods manufactured - ending finished inventory

COGS= 155,400 + (32,000*42) - (2,700*42)

COGS= $1,386,000