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    lprado521's Avatar
    lprado521 Posts: 1, Reputation: 1
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    #1

    Apr 18, 2011, 06:17 PM
    Preparing income statement using the traditional accounting system
    This company has two products: Kasement and lasient

    Kasement Lasient
    Direct materials $7 $7
    Direct labor hours 0.5 0.5
    Direct labor cost/hr $10 $10
    Sales price per unit $32 $38

    Value of
    Total costs Allocation Base allocation base
    Equip. Setups $12,500,000 # of setups 50,000
    purchase orders $8,000,000 # of orders 160,000
    machining $12,000,000 # of machine hrs 1,000,000
    testing $3,600,000 # of testing hrs 600,000
    packaging $4,600,000 # of containers 1,000,000

    kasement lasient
    annual sales & production in units 240,000 4,800
    # of units/batch 150 40
    #of orders 450 80
    # of machine hrs/unit 0.40 0.80
    testing hours 12,000 8,400
    # of containers 1,400 600


    Q: Prepare and income statement for each product using the traditional accounting system. The income statements should be prepared on a total basis and then show the average net operating income per unit using the following template for guidance:

    kasement lasient
    Sales $$$ $$$
    Direct materials $$$ $$$
    Direct labor $$$ $$$
    manufacturing overhead $$$ $$$
    Total costs $$$ $$$
    Net operating income $$$ $$$


    average operating income/unit $$$ $$$
    smoothy's Avatar
    smoothy Posts: 25,490, Reputation: 2853
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    #2

    Apr 20, 2011, 06:23 PM

    Read the rules...

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