Answer the following questions using the information below:
Kason, Inc., expects to sell 20,000 pool cues for $12.00 each. Direct materials costs are $2.00, direct manufacturing labor is $4.00, and manufacturing overhead is $0.80 per pool cue. The following inventory levels apply to 2016:
$$\begin{array} { l r r }
& \text { Beginning inventory } & \text { Ending inventory } \
\text { Direct materials } & 24,000 \text { units } & 24,000 \text { units } \
\text { Work-in-process inventory } & 0 \text { units } & 0 \text { units } \
\text { Finished goods inventory } & 2,000 \text { units } & 2,500 \text { units }
\end{array}$$
-On the 2016 budgeted income statement,what amount will be reported for cost of goods sold?

Question

Answer the following questions using the information below:
Kason, Inc., expects to sell 20,000 pool cues for $12.00 each. Direct materials costs are $2.00, direct manufacturing labor is $4.00, and manufacturing overhead is $0.80 per pool cue. The following inventory levels apply to 2016:
 $$\begin{array} { l r r } 
& \text { Beginning inventory } & \text { Ending inventory } \
\text { Direct materials } & 24,000 \text { units } & 24,000 \text { units } \
\text { Work-in-process inventory } & 0 \text { units } & 0 \text { units } \
\text { Finished goods inventory } & 2,000 \text { units } & 2,500 \text { units }
\end{array}$$
-On the 2016 budgeted income statement,what amount will be reported for cost of goods sold?

Quizplus · Accepted Answer

The cost of goods sold is calculated as: (Beginning Finished Goods Inventory + Cost of Goods Manufactured - Ending Finished Goods Inventory). The cost per unit is $6.80 ($2.00 + $4.00 + $0.80). The cost of goods manufactured for 20,500 units (20,000 sold + 2,500 ending - 2,000 beginning) is $139,400. The cost of goods sold is $136,000 (2,000 units x $6.80 + $139,400 - 2,500 units x $6.80).

Answer the Following Questions Using the Information Below: Kason, Inc

Answer the Following Questions Using the Information Below:
Kason, Inc