Farooq Company has accumulated the following budget data for the year 2020. Sales: 60,000 units, unit selling price $80. Cost of one unit of finished goods: Direct materials 3 pounds at $5 per pound, direct labor 3 hours at $6 per hour, and manufacturing overhead $7 per direct labor hour. Selling and administrative expenses: $750,000. Income taxes: 30% of income before income taxes. Instructions (a) Prepare a schedule showing the computation of cost of goods sold for 2020. (b) Prepare a budgeted income statement for 2020.

Farooq Company has accumulated the following budget data for the year 2020. Sales: 60,000 units, unit selling price $80. Cost of one unit of finished goods: Direct materials 3 pounds at $5 per pound, direct labor 3 hours at $6 per hour, and manufacturing overhead $7 per direct labor hour. Selling and administrative expenses: $750,000. Income taxes: 30% of income before income taxes. Instructions (a) Prepare a schedule showing the computation of cost of goods sold for 2020. (b) Prepare a budgeted income statement for 2020.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter7: Budgeting

Section: Chapter Questions

Problem 3PB: TIB makes custom guitars and prepared the following sales budget for the second quarter It also has...

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