Prepare an absorption-costing income statement

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Reference no: EM13901182

COST OF GOODS MANUFACTURED, INCOME STATEMENT

Paulisse Company produces hand lotion for resale by discount chains. For last year, Paulisse reported the following:

Work-in-process inventory, January 1

$13,250

Work-in-process inventory, December 31

28,250

Finished goods inventory, January 1

113,000

Finished goods inventory, December 31

85,000

Direct materials inventory, January 1

16,200

Direct materials inventory, December 31

10,700

Direct materials used

170,200

Direct labour

72,000

Plant depreciation

9,500

Salary, production supervisor

45,000

Indirect labour

40,600

Utilities, factory

5,700

Sales commissions

40,000

Salary, sales supervisor

75,000

Depreciation, factory equipment

25,000

Administrative expenses

162,000

Supplies (40% used in the factory, 60% used in the sales office)

8,000

Last year, Paulisse produced 230,000 units and sold 250,000 units at $4 per unit.

Required:

1. Prepare a statement of cost of goods manufactured.

2. Prepare an absorption-costing income statement.

Reference no: EM13901182

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