15. The company has completed everything in production, so there is no ending wo
ID: 2498238 • Letter: 1
Question
15. The company has completed everything in production, so there is no ending work in process.
Computer company, a manufacturer of computer systems, started production in November 20XX. 1. Utility cost on the factory is $500 per month. 2. Janitorial costs in the factory are $1,500 per month. 3. Utility cost on the administrative building is $100 per month. 4. Administrative supplies used are $200 per month. 5. Raw material cost for a computer total $120 per computer system. The company purchased enough materials to produce 206 computer systems. 6. Workers on the production lines are paid an average rate of $24 per hour. (Direct labor is based on the number of units produced times the hourly time to make times the hourly rate.) A computer system usually takes 3 hours to complete. 7. The rent of the equipment used to produce computer systems amounts to $4,000 per month. 8. Indirect materials cost $5 per computer that are produced. 9. Advertising costs for the computer systems will be $2,500 per month. 10. The factory building depreciation expense is $100 per month. 11. Property taxes on the factory building is $460 a month. 12. The company is leasing a building that houses a small administrative staff for $2,000 a month. 13. The administrative staff earns $3,000 a month. 14. The company just started the business, so you should realize that there are no beginning inventory amounts.15. The company has completed everything in production, so there is no ending work in process.
There are 4 parts to this project. Part 1: Using the scenario above fill in the Material purchased, material inventory and the cost item area below with the applicable information. Data: Units Produced 205 Direct Material Work in process (WIP) Finished Goods (FG) Units sold 200 Beginning Inventory 0 Beginning WIP 0 Beginning FG 0 Sales Price $580 Material purchased ? Ending WIP 0 Calculate ending FG on COGM Worksheet after you computethe cost to make one unit Advertising 2500 Ending Inventory ? Income Tax Rate 32%
Explanation / Answer
Direct material Beginning inventory 0 Material purchased 206 (1 Raw material unit required to manufacture one system Sold 200 Ending invetory 6 Cost item Direct Material Direct labor Manufacturing overheads Prime cost Conversion cost Selling and Admin expense Utility cost on factory 500 500 500 Factory Janitor salary 1,500 1,500 1,500 Utility cost on Admin Building - - 100 Admin Supplies - - 200 Material used (120*206) 24,720 24,720 - Direct Labor - 24 ph* 3hrs*206 14,832 14,832 14,832 Equipment rental 4,000 4,000 4,000 Indirect Material(5*206) 1,030 1,030 1,030 Advertising - - 2,500 Factory Building Depreciation 100 100 100 Property Taxes on factory building 460 460 460 Lease of Admin buld - - 2,000 Admin staff salaries - - 3,000 Total 24,720 14,832 7,590 47,142 22,422 7,800 Cost of Goods Manufactured: Direct Material 24,720 Direct Labor 14,832 Manufacturing overheads 7,590 Cost of Goods Manufactured 47,142 Goods produced 206 cost of production per unit 229 Income Statement Sales revenue(200*580) 116,000.0 Cost of Good produced 47,142.0 Cost of Good sold 45,768.93 (47142/206*200) Gross profit 70,231.1 (sales revenue-cost of goods sold) Selling and Admin expense 7,800.0 Net profit 62,431.1
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