tion applies to the questions displayed below The following

tion applies to the questions displayed below] The following data refer to Laredo Luggage Company for the year 20x2 Sales revenue Work-n-process inventory, December 31 Work-in-process inventory, January 1 Selling and administrative expenses Income tax expense Purchases of raw material Raw-material inventory, December 31 Raw-material inventory, January 1 Direct labor Utilities: plant Depreciation: plant and equipment Finished-goods inventory, December 31 Finished-goods Inventory, January 1 Indirect material used Indirect labor Other manufacturing overhead $ 1,000,000 30,000 36,000 150,000 90,000 180,000 25,000 30,000 190,000 40,000 50,000 50,000 15,000 8,000 12,000 40,000

Solution

Schedule cost of Goods manufactured Direct Material Raw material in beginning 30000 Add: Purchases 180000 Raw materil available for use 210000 Less: Ending inventory 25000 Raw materiala used in production 185000 Direct abour 190000 Manufacturing OH Utilities plant 40000 Depreciation of planat and equipment 50000 Indirect material used 8000 Indirect labour 12000 Other manufacturing OH 40000 Total Manufacturing OH 150000 Total Manufacturing cost 525000 Add: Beginning WIP 36000 Total Cost of Goods mnufafcturing 561000 Less: Ending Inventoory of WIP 30000 Cost of Goods manufactured 531000 Schedule f Cost of Goods sold Finished Gooods inventory in beg. 15000 Add: Cost of Goods manaufactured 531000 Total cost of goods available for sale 546000 Less: Finished Goods inventory at end 50000 Cost of Goods sold 496000 Incoem Statement Sales revenue 1,000,000 Less: Cost of Goods ssold 496000 Gross margin 504000 Less: Selling and admin expense 150000 Net Income before tax 354000 Less: Tax 90000 Net income fter tax 264000