Spencer Company produced 200,000 cases of sports drinks during the past calendar year. Each case of 1-liter bottles sells for $36. Spencer had 2,500 cases of sports drinks in finished goods inventory at the beginning of the year. At the end of the year, there were 11,500 cases of sports drinks in finished goods inventory. Spencer’s accounting records provide the following information:
Purchases of direct materials ..........$2,350,000
Direct materials inventory, January 1 ...... 290,000
Direct materials inventory, December 31 .... 112,000
Direct labor ............... 1,100,000
Indirect labor ............... 334,000
Depreciation, factory building...... 525,000
Depreciation, factory equipment..... 416,000
Property taxes on factory ......... 65,000
Utilities, factory ............ 150,000
Insurance on factory ............ 200,000
Salary, sales supervisor ......... 85,000
Commissions, salespersons ......... 216,000
Advertising ............... 500,000
General administration.......... 390,000
Work-in-process inventory, January 1.. 450,000
Work-in-process inventory, December 31.. 750,000
Finished goods inventory, January 1 ..... 107,500
Finished goods inventory, December 31... 488,750
Required:
1. Prepare a cost of goods manufactured statement.
2. Compute the cost of producing one case of sports drink last year.
3. Prepare an income statement on an absorption-costing basis. Include a column showing the percent of each line item of sales.