Cook Co. reports the following information for 2015: Sandpaper $10,000 Direct la
ID: 2416037 • Letter: C
Question
Cook Co. reports the following information for 2015:
Sandpaper
$10,000
Direct labor
$680,000
Small tools
100,000
Materials inventory, Jan 1
120,000
Coolants & lubricants
7,000
Materials inventory, Dec 31
86,000
Machine helpers' salaries
86,000
Materials purchased
980,000
Finished goods, Jan 1
10,000
Sales
4,000,000
Finished goods, Dec 31
400,000
Work-in-process, Jan 1
30,000
Leasing costs, plant
120,000
Work-in-process, Dec 31
20,000
Depreciation, plant
70,000
Sales Commissions
200,000
Property taxes, equipment
10,000
Insurance, factory equipment
5,000
Sales salaries
180,000
Advertising costs
150,000
Office administration costs
250,000
Units completed
82,000
Determine the following for Cook Co. for 2015:
Cost of DM used
Total Manufacturing Cost
Cost of Goods Manufactured
Cost of Goods Sold
Gross Margin
Operating Expenses
Net Income (Loss) (assuming a 30% tax bracket)
Unit Cost
Sandpaper
$10,000
Direct labor
$680,000
Small tools
100,000
Materials inventory, Jan 1
120,000
Coolants & lubricants
7,000
Materials inventory, Dec 31
86,000
Machine helpers' salaries
86,000
Materials purchased
980,000
Finished goods, Jan 1
10,000
Sales
4,000,000
Finished goods, Dec 31
400,000
Work-in-process, Jan 1
30,000
Leasing costs, plant
120,000
Work-in-process, Dec 31
20,000
Depreciation, plant
70,000
Sales Commissions
200,000
Property taxes, equipment
10,000
Insurance, factory equipment
5,000
Sales salaries
180,000
Advertising costs
150,000
Office administration costs
250,000
Units completed
82,000
Explanation / Answer
Cook Co. (All amounts in $) Cost of DM or Direct Materials Used Materials Inventory, Jan 1 120000 Materials Purchased 980000 1100000 Materials Inventory December 31 86000 Direct Materials Used 1014000 Total Manufacturing Costs Direct Materials Used 1014000 Direct Labor 680000 Sandpaper 10000 Small Tools 100000 Coolants & Lubricants 7000 Machine Helpers' Salaries 86000 Insurance, Factory Equipment 5000 Total Manufacturing Costs 1902000 Cost of Goods Manufactured Work-in-process, Jan 1 30000 Total Manufacturing Costs 1902000 1932000 Work-in-process, December 31 20000 Cost of Goods Manufactured 1912000 Cost of Goods Sold Finished Goods, January 1 10000 Cost of Goods Manufactured 1912000 1922000 Finished Goods, December 31 400000 Cost of Goods Sold 1522000 Gross Margin Sales 4000000 Cost of Goods Sold 1522000 Gross Margin 2478000 Operating Expenses Leasing costs, plant 120000 Depreciation, plant 70000 Property taxes, equipment 10000 Sales salaries 180000 Sales Commissions 200000 Advertising costs 150000 Office administration costs 250000 Operating Expenses 980000 Net Income (Loss) Gross Margin 2478000 Operating Expenses 980000 Net Income Before Taxes 1498000 Tax Impact @ 30% 449400 Net Income After Taxes 1048600 Unit Cost of DM used 12.37 of Cost of Goods Manufactured 23.32 of Cost of Goods Sold 18.56 of Operating Expenses 11.95