Question

Fultz Company has accumulated the following budget data for the year 2020.
1. Sales: 31,230 units, unit selling price $89.
2. Cost of one unit of finished goods: direct materials 1 pound at $6 per pound, direct labor 3 hours at $13 per hour, and manufacturing overhead $7 per direct labor hour.
3. Inventories (raw materials only): beginning, 10,170 pounds; ending, 15,490 pounds.
4. Selling and administrative expenses: $170,000; interest expense: $30,000.
5. Income taxes: 30% of income before income taxes.
Prepare a budgeted multiple-step income statement for 2020.

Answer 1

Answer:

Fultz Company

Budgeted multiple-step income statement for 2020.

Sales ( 31,230 units x $89)                                      $2,779,470

Less Cost of Sales                                                    ($138,320)

Gross Profit

Less Expenses :

Operating Expenses

Selling and administrative expenses:                      $170,000

Operating Profit

Non - Operating Expenses

Interest                                                                      ($30,000)

Income before income taxes.

Income tax expense at 30%

Net Income

Explanation:

Cost of Goods Manufactured Calculation :

Materials = 5,320  x 6           = $31,920

Direct Labor =  5,320 x $13 = $69,160

Manufacturing Overhead     = $37,290

Total                                        $138,320