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Diana Corporation provides the following information for 2017 Calculate a. cost of goods manufactured in 2017 and b. cost of goods sold in 2017 Variable manufacturing costs are variable with respect to units produced. Variable marketing, distribution, and customer-service costs are variable with respect to units sold. Production in 2017 was 100,000 units. Two pounds of direct materials are used to make one unit of finished product. Revenues in 2017 were $473,200. The selling price per unit and the purchase price per pound of direct materials were stable throughout the year. The company's ending inventory of finished goods is carried at the average unit manufacturing cost for 2017. Finished- goods inventory at December 31, 2017, was $20,970. Required 1. Calculate direct materials inventory, total cost, December 31, 2017. 2. Calculate finished-goods inventory, total units, December 31, 2017. 3. Calculate selling price in 2017. 4. Calculate operating income for 2017.

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Question Completion:

Diana Corporation provides the following information for 2017: 2-3 Beginning work-in-process inventory, 1/1/2017 Total manufacturing costs incurred in 2017 Ending work-in-process inventory, 12/31/2017 Beginning inventory of finished goods, 1/1/2017 Ending inventory of finished goods, 12/31/2017 $ 9,000 $160,000 $ 8,000 $ 15,000 $ 21,000 -) 195.000

Answer:

Diana Corporation

Aa. Cost of Goods Manufactured in 2017 is:

= $161,000

Ab. Cost of Goods Sold in 2017 is:

= $155,000

B1. Direct materials inventory, total cost, December 31, 2017:

= $ 8,000

B2. Finished Goods Inventory, total units, December 31, 2017:

= 13,125 units

B3. Selling Price in 2017 is:

= $4.92

B4. Operating Income for 2017:

Revenue                $473,200

Cost of goods sold  155,000

Gross profit           $318,200

Marketing, distribution,

and customer-service

Expenses                 195,000

Operating Income $123,200

Explanation:

a) Data and Calculations:

Beginning work-in-process inventory, 1/1/2017 = $ 9,000

Total manufacturing costs incurred in 2017 = $160,000

Ending work-in-process inventory, 12/31/2017 = $ 8,000

Beginning inventory of finished goods, 1/1/2017 = $ 15,000

Ending inventory of finished goods, 12/31/2017 = $ 21,000

Production in 2017 = 100,000 units

Direct materials = 2 pounds for 1 unit of finished product.

Revenue in 2017 = $473,200

Ending inventory of finished goods = average cost.

Finished goods inventory at December 31, 2017 = $20,970

Selling and Distribution expenses = $195,000

Cost of goods manufacturing in 2017:

Beginning work-in-process inventory, 1/1/2017 =  $ 9,000

Total manufacturing costs incurred in 2017 =    $160,000

Ending work-in-process inventory, 12/31/2017 = ($ 8,000)

Cost of goods manufactured in 2017 =             $161,000

Cost of goods sold in 2017:

Beginning inventory of finished goods, 1/1/2017 =  $ 15,000

Cost of goods manufactured in 2017 =                   $161,000

Ending inventory of finished goods, 12/31/2017 =  $ 21,000

Cost of goods sold in 2017 =                                $155,000

Production in 2017 = 100,000 units

Direct materials cost per unit = $161,000/100,000 = $1.61

Total units of finished goods inventory

Beginning inventory of finished goods, 1/1/2017 =  $ 15,000

Cost of goods manufactured in 2017 =                   $161,000

Total cost of goods available for sale = $176,000

Units = $176,000/$1.61 = 109,317 units

Ending units of finished goods inventory = $21,000/$1.61 = 13,125 units

Selling price in 2017:

Cost of goods sold = $155,000

Unit cost = $1.61

Units sold = $155,000/$1.61

= 96,273 units

Selling price = Revenue/Units sold = $473,200/96,273 = $4.92

Operating income for 2017

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