Reference no: EM132676891
Question - The following information was taken from the accounting records of Tech Inc. for the financial year 2019. The number of units of widgets produced is 2000.
R&D, marketing and customer service expenses $70,000
Ending work-in-process inventory $7,000
Indirect manufacturing labour $7,000
Beginning finished goods inventory $22,000
Machinery leasing cost $3,000
Beginning direct material inventory $11,000
Ending finished goods inventory $18,000
Ending direct material inventory $8,000
Beginning work-in-process inventory $6,000
Purchase of direct material $73,000
Miscellaneous production overheads $1,000
Depreciation on production plant $2,000
Direct manufacturing labour $9,000
Factory supplies used $2,000
Factory utilities $5,000
Sales revenue $210,000
Required -
1. Using the above information, prepare a Statement of Cost of Goods Manufactured in proper form. What is the unit cost for valuing inventory for external reporting?
2. Prepare an income statement to determine the operating income
3. Most of the company's accounting records were destroyed in a warehouse fire on December 31st, 2019. Mr. Smart, the CEO Tech Inc. did not want to give up on the business. "We need to fill out the insurance forms as soon as possible to get back all our lost inventories". Assume you are the accountant at Tech Inc. Estimate the amount recoverable in insurance proceeds.