Reference no: EM132540028

Question 1. Shimada Products Corporation of Japan is anxious to enter the electronic calculator market. Management believes that in order to be competitive in world markets, the price of the electronic calculator that the company is developing cannot exceed $15. Shimada's required rate of return is 12% on all investments. An investment of $5,000,000 would be required to purchase the equipment needed to produce the 300,000 calculators that management believes can be sold each year at the $15 price...

Required:

Compute the target cost of one calculator.

Question 2. The following data (in thousands of dollars) have been taken from the accounting records of Larop Corporation for the just completed year.

Sales ........................................................................................... $870

Purchases of raw materials ............................................. $190

Direct labor .............................................................................. $200

Manufacturing overhead ................................................... $230

Administrative expenses .................................................... $150

Selling expenses .................................................................... $140

Raw materials inventory, beginning .................................. $10

Raw materials inventory, ending ....................................... $40

Work in process inventory, beginning ............ ................ $20

Work in process inventory, ending ................................... $50

Finished goods inventory, beginning .............................. $90

Finished goods inventory, ending ................................... $130

Required:

a. Prepare Schedule of Cost of Goods Manufactured in good form.

b. Compute the Cost of Goods Sold.

c. Using data from your answers above as needed, prepare Income Statement in good form.