Prepare an income statement for Bubba Manufacturing for the year ended June 30, 2020, clearly showing cost of goods sold

Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter7: The Master Budget And Flexible Budgeting
Section: Chapter Questions
Problem 5E: Prepare a cost of goods sold budget for MacLaren Manufacturing Inc. for the year ended December 31,...
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Bubba Manufacturing Company provided the following information for the fiscal year to June 30, 2020:

Inventories                    01/07/2019            30/06/2020

Direct Materials                  $72,000                  $65,000

Work-in-Process                  107,000                   128,000

Finished Goods                     149,500                    141,700

 

Other information:

Office cleaner’s wages 4,500

Sales Revenue 1,031,000

Raw materials purchased 235,000

Factory wages 239,700

Indirect materials 23,500

Delivery truck driver’s wages 15,400

Indirect labor 9,500

Depreciation on factory plant & equipment 32,000

Insurance1 60,000

Depreciation on delivery truck 7,250

Utilities2 118,750

Administrative salaries 41,250

Special Design Costs 5,000

Selling expenses 9,000

Sales Commission 2% of gross profit

1 Of the total insurance, 66⅔% relates to the factory facilities & 33⅓% relates to general & administrative costs.

2 Of the total utilities, 80% relates to the manufacturing facilities & 20% relates to the office area.

Requirements:

Prepare an income statement for Bubba Manufacturing for the year ended June 30, 2020, clearly showing cost of goods sold.

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