Terra Cotta Designs manufactures custom tiles. The following information relates to the fiscal year ending December 31,
Question:
Terra Cotta Designs manufactures custom tiles. The following information relates to the fiscal year ending December 31, 2014:
Beginning balance in Raw Material Inventory............................. $ 450,000
Purchases of raw material..................................................... 1,500,000
Ending balance in Raw Material Inventory................................ 200,000
Beginning balance in Work in Process Inventory......................... 650,000
Ending balance in Work in Process Inventory............................. 350,000
Direct labor cost............................................................... 2,500,000
Manufacturing overhead applied ........................................... 650,000
Beginning balance in Finished Goods Inventory......................... 750,000
Ending balance in Finished Goods Inventory............................ 350,000
Sales............................................................................ 7,000,000
Selling expenses.............................................................. 500,000
General and administrative expenses...................................... 850,000
Required
a. Prepare a schedule of cost of goods manufactured. Assume that there are no indirect material costs.
b. Prepare an income statement for fiscal 2014. Ignore income taxes.
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