1.) Georgia Products Inc. completed and transferred 187,000 particle board units
ID: 2375331 • Letter: 1
Question
1.) Georgia Products Inc. completed and transferred 187,000 particle board units of production from the Pressing Department. There was no beginning inventory in process in the department. The ending in-process inventory was 16,000 units, which were 1/4 complete as to conversion cost. All materials are added at the beginning of the process. Direct materials cost incurred was $893,200, direct labor cost incurred was $92,830, and factory overhead applied was $21,770.
Determine the following for the Pressing Department. Round "cost per equivalent unit" answers to the nearest cent.
What is the Direct materials cost per equivalent unit??
2.)
Flow of Costs and Income Statement
Designer Software Inc. is a designer, manufacturer, and distributor of software for microcomputers. A new product, Design 2012, was released for production and distribution in early 2012. In January, $1,250,000 was spent on developing marketing and advertising materials. For the first six months of 2012, the company spent $1,200,000 promoting Design 2012 in trade magazines. The product was ready for manufacture on January 21, 2012.
The actual production process for the software product is fairly straightforward. First, blank CDs are brought to a CD copying machine. The copying machine requires one hour per 2,500 CDs.
After the program is copied onto the CD, the CD is brought to assembly, where assembly personnel pack the CD and manual for shipping. The direct labor cost for this work is $0.60 per unit.
The completed packages are then sold to retail outlets through a sales force. The sales force is compensated by a 20% commission on the wholesale price for all sales.
Factory overhead cost is applied to jobs at the rate of $3,000 per copy machine hour after the program is copied to the CDs. There were an additional 10,000 copied CDs, packaging, and manuals waiting to be assembled on December 31, 2012.
All I need is the Cost of Goods Sold Please!!!!
Please show me how you got the answers as well please...
Explanation / Answer
1. Total items completed = 187,000+16,000/4 = 191,000 (as the 16,000 ending inventory units was only 1/4th complete)
Total direct material cost = $893,200
So direct material cost/unit = 893,200/191,000 = $4.676
2. Direct materials cost = $8/unit
Total 250,000 units were produced in the year - including the other 10,000 CDs that were copied but not assembled, this would be a total of 260,000 units that were copied.
For this the copying machine would have taken 260,000/2500 hours = 104 hours (as it takes one hour per 2500 CDs to be copied).
The cost for this = 104 hours * $3000/hour = $312,000
So on a per unit basis, this copying cost would be 312,000/260,000 = $1.2/unit
Assembly cost is $0.6 per unit.
These are the only costs that are relevant for COGS - all others are sales and marketing costs.
So total unit cost = $8+$1.2+$0.6 = $9.8
So total COGS for the 200,000 units = $9.8*200,000 = $1,960,000.
Let me know in case of any queries.
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