Accounting: What the Numbers Mean 11th Edition by Wayne McManus,Daniel Viele,David Marshall

Exercise 10

Cost of goods manufactured, cost of goods sold, and income statement Maryville, Inc., incurred the following costs during August:

Required:
During the month, 5,300 units of product were manufactured and 4,800 units of product were sold. On August 1, Maryville, Inc., carried no inventories. On August 31, there were no inventories other than finished goods.
a. Calculate the cost of goods manufactured during August and the average cost per unit of product manufactured.
b. Calculate the cost of goods sold during August.
c. Calculate the difference between cost of goods manufactured and cost of goods sold. How will this amount be reported in the financial statements?
d. (Optional) Prepare a traditional (absorption) income statement for Maryville, Inc., for the month of August. Assume that sales for the month were $244,800 and the company's effective income tax rate was 30%.