The following data refer to Industrial Manufacturing Pty Ltd for the current years:

Required:
1. Prepare Industrial's schedule of cost of goods manufactured for the current year.
2. Prepare Industrial's schedule of cost of goods sold. The company closes overapplied or underapplied overhead into cost of goods sold.
3. Prepare Industrial's income statement.
4. Construct an Excel' spreadsheet to solve all of the preceding requirements. Show how the solution will change if the following data change.
(a) Suppose Industrial's had increased its production in the current year by 20 per cent. Would the direct material cost shown on the schedule of the cost of goods manufactured have been larger or the same? Why?
(b) Answer the same question as in requirement (a) for depreciation on the factory building.
(c) Suppose that only half of the $90,000 depreciation on equipment was related to factory machinery, and the other half was related to selling and administrative equipment. How would this have changed the schedule of cost of goods manufactured?

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Sales revenue $3 157 500 Raw material invemtory, 1 January 133 500 Purchases of raw material 1 096 500 Raw material inventory, 31 December 88 500 Direct labour cost incurred 711 000 Selling and administrative expenses 403 500 Indirect labour cost incurred 225 000 Council rates 135 000 Depreciation of factory building 187 500 Income tax expense 37 500 Indirect material used 67 500 Depreciation of factory equipment 90 000 Insurance on factory and equipment 60 000 Electricity for factory 105 000 Work in process inventory, 1 January Work in process inventory, 31 December 60 000 Finished goods inventory, 1 January 52 500 Finished goods inventory, 31 December 60 000 Applied manufacturing overhead 866 250