(1)Prepare an income statement for the year ended June 30, 2018, clearly showing the calculation of Cost of Goods sold. List the non-production overheads in order of size starting with the largest. (2) Given that the company manufactured 1,600 sun-glasses, compute the company’s unit product cost for the year.
Shades of the Caribbean design and manufacture sun-glasses for the tourism sector. The accounting
records of the business reflect the following data at June 30, 2018:
|
Inventory |
1/7/2017 |
30/6/2018
|
|
Raw Materials |
$230,000 |
$260,000
|
|
Factory Supplies |
$35,000 |
$24,000
|
|
Work in Progress |
$358,000 |
$213,000
|
|
Finished Goods |
$975,400 |
$585,000
|
Other information:
|
Sales Revenue |
$5,675,000
|
|
Factory Supplies Purchased |
64,000
|
|
Direct Factory Labor |
792,000
|
|
Raw Materials Purchased |
560,000
|
|
Plant janitorial service |
37,000
|
|
|
186,000
|
|
Total Utilities |
481,250
|
|
Production Supervisor’s Salary |
450,000
|
|
Hiring of Specialized Manufacturing Equipment |
68,000
|
|
Insurance on Plant & Equipment |
112,000
|
|
Delivery Vehicle Drivers’ Wages |
189,000
|
|
Depreciation: Delivery Vehicle |
53,850
|
|
Property Taxes |
240,000 |
|
Administrative Wages & Salaries |
850,750
|
|
Advertising Expenses |
1% of Sales Revenue
|
1 Of the total utilities, 80% relates to manufacturing and 20% relates to general and administrative costs.
2 The property taxes should be shared: 75% manufacturing & 25% general & administrative costs
Required:
(1)Prepare an income statement for the year ended June 30, 2018, clearly showing the calculation of
Cost of Goods sold. List the non-production
(2) Given that the company manufactured 1,600 sun-glasses, compute the company’s unit product cost
for the year.
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