Reference no: EM132614237
Question - Skater Mania produces skateboards. The company uses a normal costing system and machine hours (MH) to apply overhead to production. Any manufacturing overhead variance is closed to COGS at the end of the year. SM sold 450,000 skateboards during the past calendar year. The skateboards sell for $45 each
Estimated Manufacturing Overhead $450,000
Estimated direct labor hours 40,000 direct labor hours (DLHs)
Estimated machine hours 100,000 machine hours (MH)
Actual direct labor hours 55,000 direct labor hours (DLHs)
Actual machine hours 85,000 machine hours (MH)
Purchases of direct materials $350,000
Direct materials inventory, January 1 $15,000
Direct materials inventory, December 31 $40,000
Direct labor dollars $725,000
Maintenance on factory equipment $145,000
Depreciation, sales headquarters $30,000
Depreciation, factory equipment $50,000
Property taxes on the factory $20,000
Property taxes on sales headquarters $16,000
Utilities, factory $120,000
Utilities, sales headquarters $1,900
Insurance on the factory $17,000
Salary, sales supervisor $90,000
Commissions, salespersons 1.5% of sales
Salary, Administration $150,000
Work in process inventory, January 1 $25,000
Work in process inventory, December 31 $45,000
Finished goods inventory, January 1 $0
Finished goods inventory, December 31 $0
Effective tax rate 20%
Required -
1. How much is Cost of Goods Manufactured for SkaterMania Company?
2. How much is Adjusted Cost of Goods Sold for SkaterMania Company?
3. How much is Operating Income (before tax) closest to for SkaterMania Company?
4. How much is Net Income (after tax) closest to for SkaterMania Company?