1 The following information pertains to the most recent quarter at Precious Production Limited. Purchases of raw materials Raw materials inventory, beginning Raw materials inventory, ending Depreciation, factory Insurance, factory Direct labour Maintenance, factory Administrative expenses Sales Utilities, factory Supplies, factory Selling expenses Indirect labour Work in process inventory, beginning Work in process inventory, ending Finished goods inventory, beginning Finished goods inventory, ending $ 373,500 43,600 72,500 190,500 20,900 246,300 123,600 287,200 2,016,000 112,500 4,090 328,100 266,300 28,450 121,800 41,350 165,400 Required: 1. Prepare a schedule of cost of goods manufactured. PRECIOUS PRODUCTION Schedule of Cost of Goods Manufactured For the quarter ended xxxx Direct materials: Raw materials inventory, beginning Add: Purchases of raw materials Raw materials available for use 0 Deduct: Raw materials inventory, ending Raw materials used in production $ 0 Direct labour Manufacturing overhead: Depreciation, factory Indirect labour Insurance, factory Maintenance, factory Supplies, factory Utilities, factory Total overhead costs Total manufacturing costs 0 0 0 Cost of goods manufactured $ 0 2. Prepare an income statement. PRECIOUS PRODUCTION LIMITED Income Statement For the quarter ended XXXX Cost of goods sold: Selling and administrative expenses: 3. Assume that the company produced the equivalent of 19,000 units of product during the year. What was the average cost per unit for direct labour? What was the average cost per unit for factory insurance? (Round your answers to 2 decimal places.) Average cost Direct labour per unit Insurance per unit 4. Assume that the company expects to produce 21,000 units of product during the coming year. What average cost per unit and what total cost would you expect the company to incur for direct materials at this level of activity? For factory insurance? (In preparing your answer, assume that direct materials is a variable cost and that depreciation is a fixed cost; also assume that depreciation is computed on a straight- line basis.) (Do not round intermediate calculations. Round "Average cost per unit" answers to 2 decimal places.) Average cost per unit Total cost Direct materials Insurance 6. Assuming the company produced 26,000 fully and partially finished units during the year, determine the cost components of the finished goods inventory, which is composed of 5,200 finished units. Direct materials Direct labour Manufacturing overhead Total
