Designer Rags makes evening dresses. The following information was gathered from the company records for 2010, the first year of company operations. Work in Process Inventory at the end of 2010 was $31,500.
The company’s gross profit rate for the year was 35 percent.
a. Compute the cost of goods sold for 2010.
b. What was the total cost of goods manufactured for 2010?
c. What is Finished Goods Inventory at December 31, 2010?
d. If net income was $250,000, what were total selling and administrative expenses for the year?
e. Prepare journal entries to record the flow of costs for the year, assuming the company uses a perpetual inventory system and a single Manufacturing Overhead Control account and that actual overhead is included in WIP Inventory.
How do i go about solving this?