Create cost of goods manufactured and cost of goods sold

Assignment Help Cost Accounting

Reference no: EM132644718

Note 3 - Building Rent The building is all for the manufacturing facility

Note 4 - Utilities Electrical For both budget and actual costs, 90% of these costs are related to the factory, and 10% of these costs are related to the administrative office.

Note 5 - Shipping Budget: 20% of budgeted shipping costs were for the delivery of raw materials to the manufacturing facility, and the remaining 80% of the shipping costs are for the delivery of finished goods to customers. Actual: All of the shipping costs were for the deliver of finished goods to customer.

Note 6 - Overhead The manufacturer uses Normal Costing. Overhead is allocated based on Direct Labour costs. The company is unsure how to treat under/over applied overhead.

Required:

Question 1: Prepare an income statement. You may include a schedule of Cost of Goods Manufactured and Cost of Goods Sold as part of the Income Statement or as separate schedules.

Question 2: Explain which options the company can use to allocated allocate under/ over applied overhead. Identify which option you chose and why it was chosen.

Reference no: EM132644718

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