13BP_a At the end of January, Mineral L... [FREE SOLUTION]

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Foundations Of Financial Management

Stanley B. Block, Geoffrey A. Hirt, Bartley Danielsen

Business Studies

16th Edition 路 768 pages

ISBN: 9781259277160

Chapter 2: 13BP_a (page 115)

At the end of January, Mineral Labs had an inventory of 775 units, which cost $12 per unit to produce. During February, the company produced 900 units at a cost of $16 per unit. If the firm sold 1,500 units in February, what was the cost of goods sold?
a. Assume LIFO inventory accounting.

Short Answer

Expert verified

Cost of goods sold of the company is $21,600.

Step by step solution

LIFO inventory accounting method

LIFO accounting method is defined as the valuation method in which the products produced or acquired last are sold or used first. This method is rarely used by the companies.

Cost of goods sold

$\begin{array}{rcl} Cost of goods sold & = & Units 脳 Cost per unit \\ = & (900 脳 $ 16) + ((1, 500 - 900) 脳 $ 12) \\ = & $ 21, 600 \end{array}$

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HARDING COMPANY Income Statement For the year ended December 31, 20X1
Sales (10,500 skates at \(60 each)	\)630,000
Less: variable costs (10,500 tires at \(25)	262,500
Less: fixed cost	200,000
Earnings before interest and taxes (EBIT)	\)167,500
Interest expenses	62,500
Earning before taxes (EBT)	\(105,000
Income tax expenses (30%)	31,500
Earning after taxe (EAT)	\)73,500

Capital Structure
	Sinclair	Boswell
Deb @11%	\(900,000	0
Common stock, \)10 per share	600,000	\(1,500,000
Total	\)1,500,000	\(1,500,000
Common shares	60,000	150,000
Operating plans
Sales (55,000 units at \)20 each)	\(1,100,000	\)1,100,000
Less: variable cost	880,000 (\(16 per unit)	550,000 (\)10 per unit)
Fixed cost	0	305,000
Earnings before interest and taxes (EBIT)	\(220,000	\)245,000

Selling and administrative expenses	$112,000
Depreciation expenses	73,000
Sales	489,000
Interest expenses	45,000
Cost of goods sold	156,000
Taxes	47,000

Taxes	Earning per share
Share Outstanding	Earning before taxes
Interest Expense	Cost of goods sold
Depreciation Expense	Earning after taxes
Preferred Stcok dividends	Earning available to common stockholders
Sales	Selling and administrative expense
Gross profit

91影视

At the end of January, Mineral Labs had an inventory of 775 units, which cost \(12 per unit to produce. During February, the company produced 900 units at a cost of \)16 per unit. If the firm sold 1,500 units in February, what was the cost of goods sold?
a. Assume LIFO inventory accounting.

Short Answer

Step by step solution

LIFO inventory accounting method

Cost of goods sold

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Most popular questions from this chapter

Recommended explanations on Business Studies Textbooks

Family Business

Corporate Finance

Business Development

Actuarial Science in Business

Influences On Business

Project Planning & Management

Study anywhere. Anytime. Across all devices.

91影视

At the end of January, Mineral Labs had an inventory of 775 units, which cost \(12 per unit to produce. During February, the company produced 900 units at a cost of \)16 per unit. If the firm sold 1,500 units in February, what was the cost of goods sold?a. Assume LIFO inventory accounting.

Short Answer

Step by step solution

LIFO inventory accounting method

Cost of goods sold

One App. One Place for Learning.

Most popular questions from this chapter

Recommended explanations on Business Studies Textbooks

Family Business

Corporate Finance

Business Development

Actuarial Science in Business

Influences On Business

Project Planning & Management

Study anywhere. Anytime. Across all devices.

At the end of January, Mineral Labs had an inventory of 775 units, which cost \(12 per unit to produce. During February, the company produced 900 units at a cost of \)16 per unit. If the firm sold 1,500 units in February, what was the cost of goods sold?
a. Assume LIFO inventory accounting.