Cost of goods manufactured, cost of goods sold, and income statement.Champs, Inc., incurred the following costs during March:
Selling expenses........... $31,675
Direct labor................... $56,628
Interest expense............ $8,213
Manufacturing overhead, actual.... $40,950
Raw materials used....... $92,196
Administrative expenses... $24,600
Required:
During the month, 3,900 units of product were manufactured and 2,200 units of product were sold. On March1, Champs, Inc., carried no inventories. On March 31, there were no inventories for raw materials or work in process.
a) Calculate the cost of goods manufactured during March and the average cost per unit of product manufactured.
b) Calculate the cost of goods sold during March.
c) Calculate the difference between cost of goods manufactured and cost of goods sold. How will this amount be reported in the financial statements?
d) Prepare a traditional (absorption) income statement for Champs, Inc., for the month of March. Assume that sales for the month were $207,060 and the company's effective income tax rate was %35.