Prepare an absorption-costing income statement

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Reference no: EM13901182

COST OF GOODS MANUFACTURED, INCOME STATEMENT

Paulisse Company produces hand lotion for resale by discount chains. For last year, Paulisse reported the following:

Work-in-process inventory, January 1	$13,250
Work-in-process inventory, December 31	28,250
Finished goods inventory, January 1	113,000
Finished goods inventory, December 31	85,000
Direct materials inventory, January 1	16,200
Direct materials inventory, December 31	10,700
Direct materials used	170,200
Direct labour	72,000
Plant depreciation	9,500
Salary, production supervisor	45,000
Indirect labour	40,600
Utilities, factory	5,700
Sales commissions	40,000
Salary, sales supervisor	75,000
Depreciation, factory equipment	25,000
Administrative expenses	162,000
Supplies (40% used in the factory, 60% used in the sales office)	8,000

Last year, Paulisse produced 230,000 units and sold 250,000 units at $4 per unit.

Required:

1. Prepare a statement of cost of goods manufactured.

2. Prepare an absorption-costing income statement.

Reference no: EM13901182

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