Question & Answer: During the month, 18,500 units of product were manufactured and 10,000 units of product were sold. On March…..

GrandSlam, Inc., incurred the following costs during March:

During the month, 18,500 units of product were manufactured and 10,000 units of product were sold. On March 1, GrandSlam, Inc., carried no inventories. On March 31, there were no inventories for raw materials or work in process.

Required:

a. Calculate the cost of goods manufactured during March and the average cost per unit of product manufactured. (Round “Average cost per unit” to 2 decimal places.)

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b. Calculate the cost of goods sold during March. (Round “Average cost per unit” to 2 decimal places.)

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c-1. Calculate the difference between cost of goods manufactured and cost of goods sold. (Round “Average cost per unit” to 2 decimal places.)

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c-2. How will this amount be reported in the financial statements?

d. Prepare a traditional (absorption) income statement for GrandSlam, Inc., for the month of June. Assume that sales for the month were $1,049,000 and the company’s effective income tax rate was 40%. (Round “Average cost per unit” to 2 decimal places.)