Distinguish between manufacturing & non-manufacturing overhead (product versus period costs) 2) Classify costs as prime costs or conversion costs 3) Prepare a statement of cost of goods manufactured, clearly showing total manufacturing costs & total manufacturing costs to account for. 4) Prepare an income statement for a manufacturing entity, clearly showing Cost of Goods Sold. 5) Explain the difference between the income statements of a merchandiser & a manufacturer Pro-Leather Company is a manufacturer of leather cases for tablets. The following information pertains to operations during the 2020 calendar year. Sales Revenue $14,275,000 Direct Factory Labor 3,952,600 Indirect Factory Labor 1,232,250 Total Depreciation 1 400,000 Total Utilities 2 525,000 Distribution & Customer Service Costs 76,800 Insurance on Plant & Equipment 585,000 Property Taxes 3 90,000 Administrative Wages & Salaries 1,076,000 Advertising Expenses 57,700 Sales Commission 6% of Sales Revenue 1.Of the total depreciation, 80% relates to factory plant & equipment and 20% relates to general and administrative costs. 2 Of the total utilities, 75% relates to production and 25% relates to general and administrative costs. 3 The property taxes should be shared: 85% production & 15% general & administrative costs. The following additional information is also available: Inventory Data: 1/1/2020 Purchases 31/12/2020 Raw Materials $750,000 $4,330,000 $807,000 Indirect Materials 55,000 320,000 71,500 Work in Progress 1,115,400 n/a 924,000 Finished Goods 1,142,600 n/a 1,720,200
Distinguish between manufacturing & non-manufacturing overhead (product versus period costs) 2) Classify costs as prime costs or conversion costs 3) Prepare a statement of cost of goods manufactured, clearly showing total
Pro-Leather Company is a manufacturer of leather cases for tablets. The following information pertains to operations during the 2020 calendar year. Sales Revenue $14,275,000
Direct Factory Labor 3,952,600
Indirect Factory Labor 1,232,250
Total Depreciation 1 400,000
Total Utilities 2 525,000
Distribution & Customer Service Costs 76,800
Insurance on Plant & Equipment 585,000
Property Taxes 3 90,000
Administrative Wages & Salaries 1,076,000
Advertising Expenses 57,700
Sales Commission 6% of Sales Revenue
1.Of the total depreciation, 80% relates to factory plant & equipment and 20% relates to general and administrative costs. 2 Of the total utilities, 75% relates to production and 25% relates to general and administrative costs. 3 The property taxes should be shared: 85% production & 15% general & administrative costs.
The following additional information is also available: Inventory Data: 1/1/2020 Purchases 31/12/2020 Raw Materials $750,000 $4,330,000 $807,000 Indirect Materials 55,000 320,000 71,500 Work in Progress 1,115,400 n/a 924,000 Finished Goods 1,142,600 n/a 1,720,200
- a) Calculate the raw material used by Pro-Leather Company. b) Calculate the indirect materials used by Pro-Leather Company c) What is the total manufacturing overhead cost incurred by Pro-Leather Company during the period? d) Determine the prime cost & conversion cost of the cases manufactured. e) Prepare a schedule of cost of goods manufactured for the year ended December 31, 2020, clearly showing total manufacturing cost & total manufacturing costs to account. Prepare an income statement for Pro-Leather Company for the year ended December 31, 2020. List the non-manufacturing
overheads in order of size starting with the largest. g) What is the factory cost per case if Pro-Leather manufactured 19,200 cases for tablets for the year? h) How does the format of the income statement for a manufacturing concern differ from the income statement of a merchandising entity?
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