The following selected information was extracted from the 20x1 accounting records of Lone Oak Products:

Raw material purchases	$	176,000
Direct labor		256,000
Indirect labor		108,000
Selling and administrative salaries		133,000
Building depreciation*		80,000
Other selling and administrative expenses		195,000
Other factory costs		343,000
Sales revenue ($130 per unit)		1,495,000

*Seventy-five percent of the company's building was devoted to production activities; the remaining 25 percent was used for selling and administrative functions.

Inventory data:

	January 1			December 31
Raw material	$	15,900		$	18,200
Work in process		35,800			62,100
Finished goods*		113,100			97,900

*The January 1 and December 31 finished-goods inventory consisted of 1,350 units and 1,190 units, respectively.

a. Calculate Lone Oak’s manufacturing overhead for the year.

b. Calculate Lone Oak’s cost of goods manufactured.

c. Compute the company’s cost of goods sold.     

d. Determine net income for 20x1, assuming a 30% income tax rate.

e. Determine the number of completed units manufactured during the year.

Answer rating: 100% (QA)

a To calculate Lone Oaks manufacturing overhead for the year we need to determine the total indirect costs of production This would include indirect l... View the full answer