Campus Coolers Inc. manufactures portable coolers with college logos. During 201

Question

Campus Coolers Inc. manufactures portable coolers with college logos. During 2015, the company had the following costs: Direct materials used $11,500 Direct labor 17,000 Factory rent 18,000 Equipment depreciation – factory 12,000 Equipment depreciation – office 2,750 Marketing expenses 6,500 Administrative expenses 26,750 3,500 units were produced in 2015.

Required: 1. What are the total product costs for 2015? Show computation below. 2. What are the product costs per unit? Show computation below. 3. What are the total period costs for 2015? Show computation below. 4. What is the net income for 2015 if 3,000 units are sold for $25 each? Show computation below.

Explanation / Answer

1 Direct materials used 11500 Direct labor 17000 Factory rent 18000 Equipment depreciation – factory 12000 Total product costs for 2015 58500 2 Product costs per unit=58500/3500= $16.71(rounded off) 3 Equipment depreciation – office 2750 Marketing expenses 6500 Administrative expenses 26750 Total period costs for 2015 36000 4 Sales 75000 =3000*25 Cost of goods sold 50143 =58500/3500*3000 Gross Profit 24857 Less:Selling and Administrative expenses 36000 Net income(loss) for 2015 -11143

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