Question
BNC Company, which manufactures and sells laptops started business on January 1, 2017. During the year ended December 31, 2017 the company had the following
BNC Company, which manufactures and sells laptops started business on January 1, 2017. During the year ended December 31, 2017 the company had the following costs related to its business:
| (in millions of $) | ||
|
| ||
| Raw materials | $110 |
|
| Components | $140 |
|
| Labor (factory) | $80 |
|
| Salary of VP - Production | $10 |
|
| Salary of VP - Sales | $10 |
|
| CEO salary | $30 |
|
| Factory rent | $15 |
|
| Factory utilities | $8 |
|
| Machine rental (factory) | $37 |
|
| Rent (Sales Building) | $40 |
|
| Advertising Costs | $50 |
|
| Sales Commission | $20 |
|
| Utilities (sales office) | $5 |
|
| Salaries (administrative) | $25 |
|
During 2017, BNC manufactured 1 million laptops, of which 800,000 were sold for $700 each.
Required:
Identify all product (production related) costs.
What is the average cost of manufacturing one laptop? Hint: Use only "product" costs; Cost per unit = (Total Product Cost) / (Number of units produced)
Prepare an income statement for 2017. Assume a tax rate of 35%.
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The Internal Auditing Pocket Guide
Authors: J. P. Russell
1st Edition
0873895606, 978-0873895606
