The following information pertains to the most recent quarter at Precious Produc
ID: 2341634 • Letter: T
Question
The following information pertains to the most recent quarter at Precious Production Limited.
1. Prepare a schedule of cost of goods manufactured.
2. prepare income statement
3. Assume that the company produced the equivalent of 16,000 units of product during the year. What was the average cost per unit for direct labour? What was the average cost per unit for factory insurance? (Round your answers to 2 decimal places.)
4. Assume that the company expects to produce 18,000 units of product during the coming year. What average cost per unit and what total cost would you expect the company to incur for direct materials at this level of activity? For factory insurance? (In preparing your answer, assume that direct materials is a variable cost and that depreciation is a fixed cost; also assume that depreciation is computed on a straight-line basis.) (Do not round intermediate calculations. Round "Average cost per unit" answers to 2 decimal places.)
5. Assuming the company produced 24,000 fully and partially finished units during the year, determine the cost components of the finished goods inventory, which is composed of 4,800 finished units.
direct material.......
direct labour.......
manufacturing overhead.....
total..........................................
Purchases of raw materials $ 385,500 Raw materials inventory, beginning 46,800 Raw materials inventory, ending 76,500 Depreciation, factory 210,500 Insurance, factory 21,700 Direct labour 251,900 Maintenance, factory 126,800 Administrative expenses 293,600 Sales 2,208,000 Utilities, factory 116,500 Supplies, factory 4,170 Selling expenses 335,300 Indirect labour 271,900 Work in process inventory, beginning 28,850 Work in process inventory, ending 123,400 Finished goods inventory, beginning 42,550 Finished goods inventory, ending 170,2001. Prepare a schedule of cost of goods manufactured.
2. prepare income statement
3. Assume that the company produced the equivalent of 16,000 units of product during the year. What was the average cost per unit for direct labour? What was the average cost per unit for factory insurance? (Round your answers to 2 decimal places.)
4. Assume that the company expects to produce 18,000 units of product during the coming year. What average cost per unit and what total cost would you expect the company to incur for direct materials at this level of activity? For factory insurance? (In preparing your answer, assume that direct materials is a variable cost and that depreciation is a fixed cost; also assume that depreciation is computed on a straight-line basis.) (Do not round intermediate calculations. Round "Average cost per unit" answers to 2 decimal places.)
5. Assuming the company produced 24,000 fully and partially finished units during the year, determine the cost components of the finished goods inventory, which is composed of 4,800 finished units.
direct material.......
direct labour.......
manufacturing overhead.....
total..........................................
Explanation / Answer
Schedule for manufacturing cost beginning raw material 46800 Add Purchase of raw material 385500 Total 432300 Less Ending Raw material 76500 Raw material used in production 355800 Direct labor 251900 Factory overheads Depreciation factory 210500 Insurance factory 21700 Maintenance factory 126800 Utilities factory 116500 Indirect labor 271900 Supplies factory 4170 Total factory overheads 751570 Total manufacturing cost 1359270 Add Beginning work in progress 28850 1388120 less Ending work in progress 123400 Cost of goods manufactured 1264720 Add Beginning finished goods inventory 42550 Cost of goods available for sale 1307270 Less Ending finished goods inventory 170200 Cost of goods sold 1137070 Schedule for net income Sales revenue 2208000 Less Cost of goods sold 1137070 Gross profit 1070930 Less Expenses Admin expense 293600 Selling expense 335300 628900 Net operating income 442030
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