E-7 Good Luck Company has been suffering losses since its incorporation. After 4 years of consecutive...

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E-7 Good Luck Company has been suffering losses since its incorporation. After 4 years of consecutive losses, the company president was hopeful to have a profit in 2014. But when he had found the Income Statement for the year ended 2014, he became very disappointed and thinking of closing the operations. Before doing so he seeks your recommendation as the Income Statement for the year ended 2014 were prepared by a new accountant in absence of the responsible accountant who has been sick for a month. To facilitate your recommendation the following data are available: Good Luck Company Income Statement For the year ended 31 December, 2014 TK Descriptions Sales TK 6,00,000 Less: Operating Expenses i) ii) iii) iv) v) vi) vii) viii) ix) х) xi) Total Selling and Administrative Salary Rent on Factory Facilities Purchase 35,000 40,000 1,90,000 8,000 Insurance-Factory Depreciation- Sales Equipment Utilities-Factory 10,000 50,000 Indirect Labour 1,08,000 90,000 12,000 7,000 80,000 Direct Labour Depreciation-Factory Equipment Maintenance-Factory Advertising 6,30,000 30,000 Net Operating Loss Additional Information: i) ii) Raw Materials Work in process 20% of the rent on facilities are applied to administrative activities Ending Tk.42,000 85,000 60,000 Beginning Tk.17,000 70,000 20,000 Inventory balances follow Finished Goods Required: i) Prepare a Cost of Goods Sold Statement. ii) Suppose the company has produced 15,000 units in 2014, find a. Unit cost of direct materials b. per unit factory maintenance. iii) If the company produce 20,000 units in 2015 a. What will be the unit cost of direct materials and total direct material cost? b. What will be the unit cost of factory maintenance and total factory maintenance? E-7 Good Luck Company has been suffering losses since its incorporation. After 4 years of consecutive losses, the company president was hopeful to have a profit in 2014. But when he had found the Income Statement for the year ended 2014, he became very disappointed and thinking of closing the operations. Before doing so he seeks your recommendation as the Income Statement for the year ended 2014 were prepared by a new accountant in absence of the responsible accountant who has been sick for a month. To facilitate your recommendation the following data are available: Good Luck Company Income Statement For the year ended 31 December, 2014 TK Descriptions Sales TK 6,00,000 Less: Operating Expenses i) ii) iii) iv) v) vi) vii) viii) ix) х) xi) Total Selling and Administrative Salary Rent on Factory Facilities Purchase 35,000 40,000 1,90,000 8,000 Insurance-Factory Depreciation- Sales Equipment Utilities-Factory 10,000 50,000 Indirect Labour 1,08,000 90,000 12,000 7,000 80,000 Direct Labour Depreciation-Factory Equipment Maintenance-Factory Advertising 6,30,000 30,000 Net Operating Loss Additional Information: i) ii) Raw Materials Work in process 20% of the rent on facilities are applied to administrative activities Ending Tk.42,000 85,000 60,000 Beginning Tk.17,000 70,000 20,000 Inventory balances follow Finished Goods Required: i) Prepare a Cost of Goods Sold Statement. ii) Suppose the company has produced 15,000 units in 2014, find a. Unit cost of direct materials b. per unit factory maintenance. iii) If the company produce 20,000 units in 2015 a. What will be the unit cost of direct materials and total direct material cost? b. What will be the unit cost of factory maintenance and total factory maintenance?

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li Cost of Goods seld stalement Obening Raw Matesual Puchoses 17000 ... View the full answer