Problem 2-43 (35 minutes) 1. Laredo Luggage Company Schedule of Cost of Goods Manufactured For the Year Ended December 31, 20x2 Direct material: Raw-material inventory, January 1 $ 20,000 Add: Purchases of raw material 90,000 Raw material available for use $110,000 Deduct: Raw-material inventory, December 31 12,500 Raw material used $97,500 Direct labor 100,000 Manufacturing overhead: Indirect material $ 5,000 Indirect labor 7,500 Utilities: plant 20,000 Depreciation: plant and equipment 30,000 Other 40,000 Total manufacturing overhead 102,500 Total manufacturing costs $300,000 Add: Work-in-process inventory, January 1 20,000 Subtotal $320,000 Deduct: Work-in-process inventory, December 31 15,000 Cost of goods manufactured $305,000 2. Laredo Luggage Company Schedule of Cost of Goods Sold For the Year Ended December 31, 20x2 Finished goods inventory, January 1 $ 10,000 Add: Cost of goods manufactured 305,000 Cost of goods available for sale $315,000 Deduct: Finished-goods inventory, December 31 25,000 Cost of goods sold $290,000 Problem 2-43 (Continued) 3. Laredo Luggage Company Income Statement For the Year Ended December 31, 20x2 Sales revenue $475,000 Less: Cost of goods sold 290,000 Gross margin $185,000 Selling and administrative expenses 75,000 Income before taxes $110,000 Income tax expense 45,000 Net income $65,000 4. In the electronic version of the solutions manual, press the CTRL key and click on the following link: 10E - Build a Spreadsheet 02-43.xls PROBLEM 2-44 (30 MINUTES) 1. Manufacturing overhead: Indirect labor………………………………. $ 218,000 Building depreciation ($160,000 x 75%).. 120,000 Other factory costs……………………….. 688,000 Total……………………………………... $1,026,000 2. Cost of goods manufactured: Direct Show More
