Pro-Leather Company is a manufacturer of leather cases for tablets. The following information pertains to operations during the 2020 calendar year. Sales Revenue Direct Factory Labor Indirect Factory Labor Total Depreciation 1 Total Utilities 2 Distribution & Customer Service Costs Insurance on Plant & Equipment $14,275,000 3,952,600 1,232,250 400,000 525,000 76,800 585,000 90,000 Property Taxes 3 Administrative Wages & Salaries Advertising Expenses Sales Commission 1,076,000 57,700 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 55,000 1,115,400 1,142,600 $4,330,000 320,000 n/a n/a $807,000 Indirect Materials Work in Progress Finished Goods 71,500 924,000 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 for. f) 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.

FINANCIAL ACCOUNTING

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ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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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 for.

f) 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?

Pro-Leather Company is a manufacturer of leather cases for tablets. The following information pertains to
operations during the 2020 calendar year.
Sales Revenue
Direct Factory Labor
Indirect Factory Labor
Total Depreciation
$14,275,000
3,952,600
1,232,250
400,000
Total Utilities 2
525,000
Distribution & Customer Service Costs
76,800
585,000
90,000
Insurance on Plant & Equipment
Property Taxes 3
Administrative Wages & Salaries
1,076,000
57,700
6% of Sales Revenue
Advertising Expenses
Sales Commission
I 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
$4,330,000
320,000
n/a
Raw Materials
$750,000
$807,000
Indirect Materials
55,000
1,115,400
1,142,600
71,500
Work in Progress
Finished Goods
924,000
1,720,200
n/a
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 for.
f) 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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