Spencer Company produced 200,000 cases of sports drinks during the past calendar year. Each case of 1-liter bottles sells for $36. Spencer had 2,500 cases of sports drinks in finished goods inventory at the beginning of the year. At the end of the year, there were 11,500 cases of sports drinks in finished goods inventory. Spencer’s accounting records provide the following information: Purchases of direct materials $2,360,000 Direct materials inventory, January 1 290,000 Direct materials inventory, December 31 116,000 Direct labor 1,100,000 Indirect labor 334,000 Depreciation, factory building 525,000 Depreciation, factory equipment 416,000 Property taxes on factory 65,000 Utilities, factory 150,000 Insurance on factory 200,000 Salary, sales supervisor 85,000 Commissions, salespersons 214,000 Advertising 500,000 General administration 390,000 Work-in-process inventory, January 1 440,000 Work-in-process inventory, December 31 750,000 Finished goods inventory, January 1 107,500 Finished goods inventory, December 31 488,750 Required: 2. Compute the cost of producing one case of sports drink last year. If required, round your answer to the nearest cent. Calculate cost of goods manufactured. 3. Prepare an income statement on an absorption-costing basis. Show the percentage of sales that each line item represents. Round the percent to four decimal places before converting to a percentage. For example, .88349 would be rounded to .8835 and entered as 88.35. ** calculate percentage of sales for #3
Spencer Company produced 200,000 cases of sports drinks during the past calendar year. Each case of 1-liter bottles sells for $36. Spencer had 2,500 cases of sports drinks in finished goods inventory at the beginning of the year. At the end of the year, there were 11,500 cases of sports drinks in finished goods inventory. Spencer’s accounting records provide the following information: Purchases of direct materials $2,360,000 Direct materials inventory, January 1 290,000 Direct materials inventory, December 31 116,000 Direct labor 1,100,000 Indirect labor 334,000 Depreciation, factory building 525,000 Depreciation, factory equipment 416,000 Property taxes on factory 65,000 Utilities, factory 150,000 Insurance on factory 200,000 Salary, sales supervisor 85,000 Commissions, salespersons 214,000 Advertising 500,000 General administration 390,000 Work-in-process inventory, January 1 440,000 Work-in-process inventory, December 31 750,000 Finished goods inventory, January 1 107,500 Finished goods inventory, December 31 488,750 Required: 2. Compute the cost of producing one case of sports drink last year. If required, round your answer to the nearest cent. Calculate cost of goods manufactured. 3. Prepare an income statement on an absorption-costing basis. Show the percentage of sales that each line item represents. Round the percent to four decimal places before converting to a percentage. For example, .88349 would be rounded to .8835 and entered as 88.35. ** calculate percentage of sales for #3
Spencer Company produced 200,000 cases of sports drinks during the past calendar year. Each case of 1-liter bottles sells for $36. Spencer had 2,500 cases of sports drinks in finished goods inventory at the beginning of the year. At the end of the year, there were 11,500 cases of sports drinks in finished goods inventory. Spencer’s accounting records provide the following information: Purchases of direct materials $2,360,000 Direct materials inventory, January 1 290,000 Direct materials inventory, December 31 116,000 Direct labor 1,100,000 Indirect labor 334,000 Depreciation, factory building 525,000 Depreciation, factory equipment 416,000 Property taxes on factory 65,000 Utilities, factory 150,000 Insurance on factory 200,000 Salary, sales supervisor 85,000 Commissions, salespersons 214,000 Advertising 500,000 General administration 390,000 Work-in-process inventory, January 1 440,000 Work-in-process inventory, December 31 750,000 Finished goods inventory, January 1 107,500 Finished goods inventory, December 31 488,750 Required: 2. Compute the cost of producing one case of sports drink last year. If required, round your answer to the nearest cent. Calculate cost of goods manufactured. 3. Prepare an income statement on an absorption-costing basis. Show the percentage of sales that each line item represents. Round the percent to four decimal places before converting to a percentage. For example, .88349 would be rounded to .8835 and entered as 88.35. ** calculate percentage of sales for #3
Spencer Company produced 200,000 cases of sports drinks during the past calendar year. Each case of 1-liter bottles sells for $36. Spencer had 2,500 cases of sports drinks in finished goods inventory at the beginning of the year. At the end of the year, there were 11,500 cases of sports drinks in finished goods inventory. Spencer’s accounting records provide the following information:
Purchases of direct materials
$2,360,000
Direct materials inventory, January 1
290,000
Direct materials inventory, December 31
116,000
Direct labor
1,100,000
Indirect labor
334,000
Depreciation, factory building
525,000
Depreciation, factory equipment
416,000
Property taxes on factory
65,000
Utilities, factory
150,000
Insurance on factory
200,000
Salary, sales supervisor
85,000
Commissions, salespersons
214,000
Advertising
500,000
General administration
390,000
Work-in-process inventory, January 1
440,000
Work-in-process inventory, December 31
750,000
Finished goods inventory, January 1
107,500
Finished goods inventory, December 31
488,750
Required:
2. Compute the cost of producing one case of sports drink last year. If required, round your answer to the nearest cent.
Calculate cost of goods manufactured.
3. Prepare an income statement on an absorption-costing basis. Show the percentage of sales that each line item represents. Round the percent to four decimal places before converting to a percentage. For example, .88349 would be rounded to .8835 and entered as 88.35.
** calculate percentage of sales for #3
Definition Video Definition Accounting method wherein the cost of a tangible asset is spread over the asset's useful life. Depreciation usually denotes how much of the asset's value has been used up and is usually considered an operating expense. Depreciation occurs through normal wear and tear, obsolescence, accidents, etc. Video
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