hades 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 Depreciation: Plant & Equipment 186,000 Total Utilities 1 481,250 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 2 240,000 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.Determine the prime cost & conversion cost of the product manufactured. 2. Prepare a schedule of cost of goods manufactured for the year ended June 30, 2018, clearly showing total manufacturing costs & total manufacturing costs to account for. 3. 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. 4. Given that the company manufactured 1,600 sun-glasses, compute the company’s unit product cost for the year.
hades 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
Depreciation: Plant & Equipment 186,000
Total Utilities 1 481,250
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 2 240,000
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.Determine the prime cost & conversion cost of the product manufactured.
2. Prepare a schedule of cost of goods manufactured for the year ended June 30, 2018, clearly
showing total
3. Prepare an income statement for the year ended June 30, 2018, clearly showing the calculation of
Cost of Goods sold. List the non-production
4. Given that the company manufactured 1,600 sun-glasses, compute the company’s unit product cost
for the year.
A system of accounting under which all the costs that are incurred by a firm are added together in order to ascertain the cost incurred in the production process refers to cost accounting. Unlike financial accounting, it is not mandatory to prepare the cost reports, it is only for the internal use.
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