Orman Company produces neon-colored covers for tablets (e.g., iPads). For last year, Orman reported the following:
Work-in-process inventory, January 1 ......... $ 13,250
Work-in-process inventory, December 31 ......... 28,250
Finished goods inventory, January 1 ............ 113,000
Finished goods inventory, December 31 ......... 85,000
Direct materials inventory, January 1 ........... 3,450
Direct materials inventory, December 31 ......... 2,700
Direct materials purchased ............... 183,750
Direct labor ..................... 138,000
Plant depreciation ................. . 19,500
Salary, production supervisor .............. 47,000
Indirect labor ................. 68,300
Utilities, factory .................. 15,700
Sales commissions .................. 42,000
Salary, sales supervisor .............. 75,000
Depreciation, factory equipment ........... 32,000
Administrative expenses ............ 168,000
Supplies (40% used in the factory, 60% used in the sales office) 18,000
Advertising expense ................ 43,600
Last year, Orman produced 89,000 units and sold 90,500 units at $10.50 per unit.
Required:
1. Prepare a statement of cost of goods manufactured.
2. Prepare an absorption-costing income statement.