12/16/2020 Chapter 2 Homework-L

Student: Date: 12/16/20 Instructor:

Assignment: Chapter 2 Homework
Course: ACCT302

4. Tampa Office Equipment manufactures and sells metal shelving. It began operations on January 1, 2017.
1
(Click the icon to view the costs incurred during 2017.) 2(Click the icon to view the inventory data.)
Revenues in 2017 were $518,400. The selling price per unit and the purchase price per pound of direct materials were stable throughout the year. The company's
ending inventory of finished goods is carried at the average unit manufacturing cost for 2017. Finished-goods inventory at December 31, 2017, was $15,400.
Read the requirements3.

Review Only
Click the icon to see the Worked Solution.

Requirement 1. Calculate direct materials inventory, total cost, December 31, 2017.

Determine the formula, then calculate ending direct materials total cost.

Ending direct materials in pounds × Direct materials cost per pound = Ending direct materials total cost
2,200 × 0.65 = $ 1,430

Requirement 2. Calculate finished-goods inventory, total units, December 31, 2017.

Before we calculate the units for ending finished goods, we will first calculate the total cost of goods manufactured. (If a box is not used in the table, leave the box
empty; do not enter a zero.)

Manufacturing costs for 115,000 units

Variable Fixed Total
Direct materials used $ 149,500 $ 149,500

Direct manufacturing labor costs 29,500 29,500

Plant energy costs 6,000 6,000

Indirect manufacturing labor costs 17,000 $ 13,000 30,000

Other indirect manufacturing costs 7,000 31,000 38,000

$ 209,000 $ 44,000 $ 253,000

Cost of goods manufactured

Now select the labels used to calculate ending finished goods inventory in total units, then calculate the finished goods inventory in total units at December 31, 2017.
(Round intermediary calculations to the nearest cent. Abbreviations used: DM = direct materials, COG = cost of goods, End = Ending.)

Ending finished goods

End finished goods in $ ÷ Manufacturing cost per unit = inventory in units
15,400 ÷ $ 2.20 = 7,000
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12/16/2020 Chapter 2 Homework-Leticia Trueblood
Requirement 3. Calculate selling price in 2017. (Abbreviations used: DM = direct materials, COG = cost of goods.)

Determine the formula to calculate selling price.

Total revenues ÷ Total units sold = Selling price

(Enter your answer to the nearest cent.)

The 2017 selling price is $ 4.80 per unit.

Requirement 4. Calculate operating income for 2017.

Begin preparing the income statement by selecting the labels in the appropriate order, then enter the amounts and calculate the operating income/(loss). (Use a
parentheses or a minus sign for an operating loss. For amounts with a $0 balance, make sure to enter "0" in the appropriate cell. Complete all answer boxes.)

Tampa Office Equipment

Income Statement
For the Year Ended December 31, 2017
Revenues $ 518,400

Cost of goods sold:

Beginning finished goods, Jan. 1, 2017 $ 0

Cost of goods manufactured 253,000

Cost of goods available for sale 253,000

Ending finished goods, Dec. 31, 2017 15,400 237,600

Gross margin 280,800

Operating costs:
Marketing, distribution, and customer-service costs 175,000

Administrative costs 58,000 233,000

$ 47,800
Operating income (loss)

1: Data Table
Costs incurred for 2017 are as follows (V stands for variable; F stands for fixed):

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 12/16/2020 Chapter 2 Homework-Leticia Trueblood

Direct materials used $149,500 V

Direct manufacturing labor costs $29,500 V
Plant energy costs $6,000 V
Indirect manufacturing labor costs $17,000 V

Indirect manufacturing labor costs $13,000 F

Other indirect manufacturing costs $7,000 V
Other indirect manufacturing costs $31,000 F
Marketing, distribution, and customer-service costs $125,000 V
Marketing, distribution, and customer-service costs $50,000 F
Administrative costs $58,000 F

Variable manufacturing costs are variable with respect to units produced. Variable marketing, distribution, and customer-service costs are variable with respect to
units sold.

2: Data Table
Inventory data are as follows:

Beginning: Ending:
January 1, 2017 December 31, 2017
Direct materials 0 lb 2,200 lbs
Work in process 0 units 0 units
Finished goods 0 units ? units

Production in 2017 was 115,000 units. Two pounds of direct materials are used to make one unit of finished product.

3: Requirements
1.Calculate direct materials inventory, total cost, December 31, 2017.
2.Calculate finished-goods inventory, total units, December 31, 2017.
3.Calculate selling price in 2017.
4.Calculate operating income for 2017.

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