Garza Company Has Accumulated the Following Budget Data for the Year

question 98

Essay

Garza Company has accumulated the following budget data for the year 2010.
1. Sales: 30,000 units, unit selling price $50.
2. Cost of one unit of finished goods: Direct materials 2 pounds at $5 per pound, direct labor 1.5 hours at $12 per hour, and manufacturing overhead $6 per direct labor hour.
3. Inventories (raw materials only): Beginning, 10,000 pounds; ending, 15,000 pounds.
4. Raw materials cost: $5 per pound.
5. Selling and administrative expenses: $160,000.
6. Income taxes: 30% of income before income taxes.
Instructions
(a) Prepare a schedule showing the computation of cost of goods sold for 2010.
(b) Prepare a budgeted income statement for 2010.

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Definitions:

AASB 133

Refers to the Australian Accounting Standards Board standard on Earnings per Share, outlining how to calculate and present earnings per share in financial statements.

Publicly Traded

Refers to companies or securities that are available for buying and selling on the public stock exchanges.

Time-weighting Factor

A calculation used to adjust the influence of specific data points in an averaging or forecasting method based on their occurrence in time.

Ordinary Shares

Shares of a company that entitle the holder to dividends as declared and give them voting rights in company meetings.