Question: Lockhart Enterprises recently completed its first fiscal year and developed

Lockhart Enterprises recently completed its first fiscal year and developed the following income statement. M. J., the manager, cannot understand why it is showing a net loss when the number of units sold exceeded expectations. Analyze the following income statement and other information given and write a memo to M. J. explaining your findings.
Additional information:
1. The ending balances of Direct Materials Inventory, Work- in- Process Inventory, and Finished Goods Inventory were $ 200,000, $ 381,750, and $ 76,350, respectively.
2. There were no indirect materials used in production.
3. Facility- sustaining overhead consists of depreciation on factory; heat, light, and power for factory; and insurance for factory.
4. There was no over or under applied overhead at any level.


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  • CreatedMarch 25, 2015
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