Assignment #1 contains four cases. Please read each case and answer the questions posed in the "Required" sections. Be sure to include your workings. See the course syllabus for additional information regarding assignments. Case #1 Stony Electronics Corporation manufactures a portable radio designed for mounting on the wall of the bathroom. The following list represents some of the different types of costs incurred in 2021 for the manufacture of these radios: Printed circuit boards used in radios Insurance on the factory Direct labour Rent on the production facility Supervision in the production facility Factory utilities Cost of maintaining and repairing production equipment Indirect labour in the production facility Depreciation on manufacturing equipment Cost of plastic used to make radio case Sales commissions Sales salaries Advertising Salary of the factory assistant in the production facility Depreciation on equipment in the head office Salary of the office assistant in the head office Accounting staff $400,000 5,750 325,900 50,000 190,000 35,600 34,000 76,800 23,500 130,000 80,000 123,780 45,000 67,000 28,000 54,000 255,000 1

Required: A) Using the following format, classify the costs and total the amounts in each column. Direct Direct Manufacturing Selling Administrative Costs materials labour overhead expense expense B) What was the total product cost for 2021? C) What was the total period cost for 2021? D) Compute prime costs and conversion costs. E) Using your own words, describe the different between product costs and period costs. Why is it important for companies to distinguish between these types of costs? F) If the company sold 50,000 units during the year, what was the manufacturing cost per unit? 2

Case #2 Lighting Limited., a manufacturing company, reported the following information for the month of May: Account Balances Finished Goods Inventory, May 31 Factory Supervisory Salaries Income Tax Expense Raw Materials Inventory, May 1 Work In Process Inventory, May 31 Sales Salaries Expense Factory Depreciation Expense Finished Goods Inventory, May 1 Raw Materials Purchases Work In Process Inventory, May 1 Factory Utilities Expense Direct Labor Raw Materials Inventory, May 31 Sales Returns and Allowances Factory supplies used Marketing and promotion Depreciation of general office equipment Indirect Labor Required $42,000 12,000 18,000 15,000 35,000 14,000 5,000 65,000 60,000 30,000 4,000 70,000 19,000 5,000 7,600 5,600 5,700 21,000 (A) Prepare a cost of goods manufactured statement for May. Hint: Determine total manufacturing overhead before preparing statement. (B) Compute the cost of goods sold for May.