Hickey Corporation is a manufacturer that produces a single product. The following information has been taken from the company€™s production, sales, and cost records for the just completed year:
Production in units . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30,000
Sales in units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ?
Ending finished goods inventory in units . . . . . . . . . . ?
Sales in dollars. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $650,000
Costs:
Advertising . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $50,000
Direct labor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $80,000
Indirect labor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $60,000
Raw materials purchased. . . . . . . . . . . . . . . . . . . . . $160,000
Building rent (production uses 80% of
the space; administrative and sales
offices use the rest) . . . . . . . . . . . . . . . . . . . . . . . $50,000
Utilities, factory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $35,000
Royalty paid for use of production
patent, $1 per unit produced. . . . . . . . . . . . . . . . . ?
Maintenance, factory . . . . . . . . . . . . . . . . . . . . . . . . $25,000
Rent for special production equipment,
$6,000 per year plus $0.10 per unit
produced. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ?
Selling and administrative salaries . . . . . . . . . . . . . . $140,000
Other factory overhead costs . . . . . . . . . . . . . . . . . . $11,000
Other selling and administrative expenses. . . . . . . . $20,000

The finished goods inventory is being carried at the average unit production cost for the year. The selling price of the product is $25 per unit.

Required:
1. Prepare a schedule of cost of goods manufactured for the year.
2. Compute the following:
a. The number of units in the finished goods inventory at the end of the year.
b. The cost of the units in the finished goods inventory at the end of the year.
3. Prepare an income statement for theyear.

Transcribed Image Text:

Beginning of Year End of Year Inventories: aterials. Work in process.. Finished goods.. $20,000 $30,000 S0 $10,000 $40,000