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: 1) Prepare a schedule of cost of goods manufactured for the year ended June 30, 2020, clearly showing total manufacturing costs & total manufacturing costs to account for. 2) Prepare an income statement for Bubba Manufacturing for the year ended June 30, 2020, clearly showing cost of goods sold. 3) During the year, Bubba Manufacturing Company produced 4,000 units of product. What was the production cost of each unit? 4) How does the format of the income statement for a manufacturing entity differ from the income statement of a merchandising entity?
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
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:
1) Prepare a schedule of cost of goods manufactured for the year ended June 30, 2020, clearly showing total
2) Prepare an income statement for Bubba Manufacturing for the year ended June 30, 2020, clearly showing cost of goods sold.
3) During the year, Bubba Manufacturing Company produced 4,000 units of product. What was the production cost of each unit?
4) How does the format of the income statement for a manufacturing entity differ from the income statement of a merchandising entity?
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