. is a designer, manufacturer, and distributor of low-cost, high-quality stainless steel kitchen knives. A new kitchen knife series called the Kitchen Ninja was released for production in early 20Y8. In January, the company spent $615,000 to develop a late-night advertising infomercial for the new product. During 20Y8, the company spent $1,384,000 advertising the product through these infomercials. In addition, the company incurred $811,000 in legal costs. The knives were ready for manufacture on January 1, 20Y8. Ginocera uses a job order cost system to accumulate costs associated with the kitchen knife. The unit direct materials cost for the knife is as follows:
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Hardened steel blanks (used for knife shaft and blade) | $4.00 |
Wood (for handle) | 1.55 |
Packaging | 0.40 |
Number of customers (stores) | 59,500 |
Number of knives sold | 1,123,000 |
Wholesale price (to store) per knife | $18 |
Required: | |||
1. | Prepare an annual income statement for the Kitchen Ninja knife series, including supporting calculations, from the information provided. Refer to the list of Amount Descriptions for exact wording of the answer choices for text entries. Be sure to complete the statement heading.* | ||
2. | Determine the balances in the work in process and finished goods inventories for the Kitchen Ninja knife series on December 31, 20Y8.*
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