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    Income Statement

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    Acme Co. makes widgets, during 2005 the company sales were 600,000. Costs in 2004:

    Raw materials 70,000
    Direct labor 180,000
    Indirect labor 15,000
    Equipment rent 25,000
    Factory utilities 10,000
    Misc factory supplies 17,000
    building depreciation 15,000
    property taxes 5,000
    production salaries 75,000
    administrative salaries 120,000
    Misc selling and admin costs 29,000

    Inventory balances at beginning and end of year:
    raw materials 21,000 (beginning) - 17,000 (end)
    work in progress 30,000 (beginning) - 35,000 (end)
    finished goods 45,000 (beginning) - 47,000 (end)

    60% of factory building was devoted to manufacturing, so 60% of depreciation and taxes is treated as factory cost. Company was subject to income tax rate of 30%

    Compute the following:
    Raw materials consumed
    Factory overhead incurred
    Cost of furniture manufactured
    Cost of furniture sold
    Selling and admin expenses incurred

    Also prepare an Income Statement for Acme Co. for 2004.

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    Solution Summary

    Income Statement is created.