Walt Bach Company has accumulated the following budget data for the year 2016.
1. Sales: 40000 units unit selling price $50.
2. Cost of one unit of finished goods: Direct materials 2 pounds at $5 per pound direct labor 1.5 hours at $12 per hour and manufacturing overhead $6 per direct labor hour.
3. Inventories (raw materials only): Beginning 10000 pounds; ending 15000 pounds.
4. Raw materials cost: $5 per pound.
5. Selling and administrative expenses: $200000.
6. Income taxes: 30% of income before income taxes.
Instructions
(a) Prepare a schedule showing the computation of cost of goods sold for 2016.
(b) Prepare a budgeted income statement for 2016.

Question

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The Answer of Walt Bach Company has accumulated the following budget data for the year 2016.
1. Sales: 40000 units unit selling price $50.
2. Cost of one unit of finished goods: Direct materials 2 pounds at $5 per pound direct labor 1.5 hours at $12 per hour and manufacturing overhead $6 per direct labor hour.
3. Inventories (raw materials only): Beginning 10000 pounds; ending 15000 pounds.
4. Raw materials cost: $5 per pound.
5. Selling and administrative expenses: $200000.
6. Income taxes: 30% of income before income taxes.
Instructions
(a) Prepare a schedule showing the computation of cost of goods sold for 2016.
(b) Prepare a budgeted income statement for 2016.

Walt Bach Company Has Accumulated the Following Budget Data for the Year