Question
Cost Assignment Methods Brody Company makes industrial cleaning solvents. Various chemicals, detergent, and water are mixed together and then bottled in 10-gallon drums. Brody provided
Cost Assignment Methods
Brody Company makes industrial cleaning solvents. Various chemicals, detergent, and water are mixed together and then bottled in 10-gallon drums. Brody provided the following information for last year:
Raw materials purchases | $280,000 |
Direct labor | 140,000 |
Depreciation on factory equipment | 45,000 |
Depreciation on factory building | 30,000 |
Depreciation on headquarters building | 45,000 |
Factory insurance | 15,000 |
Property taxes: | |
Factory | 20,000 |
Headquarters | 18,000 |
Utilities for factory | 34,000 |
Utilities for sales office | 2,400 |
Administrative salaries | 150,000 |
Indirect labor salaries | 159,000 |
Sales office salaries | 90,000 |
Beginning balance, raw materials | 127,000 |
Beginning balance, work in process | 124,000 |
Beginning balance, finished goods | 84,000 |
Ending balance, raw materials | 102,000 |
Ending balance, work in process | 130,000 |
Ending balance, finished goods | 79,000 |
Last year, Brody completed 100,000 units. Sales revenue equaled $1,200,000, and Brody paid a sales commission of 5 percent of sales.
Required:
1. Calculate the direct materials used in production for last year.
$
2. Calculate total prime cost.
$
3. Calculate total conversion cost.
$
4. Prepare a cost of goods manufactured statement for last year.
Brody Company | |
Statement of Cost of Goods Manufactured | |
For Last Year | |
Direct materials | $ |
Direct labor | |
Overhead | |
Total manufacturing cost | $ |
Add: Beginning work in process | |
Less: Ending work in process | |
Cost of goods manufactured | $ |
Calculate the unit product cost. If required, round your answer to the nearest cent.
$
5. Prepare a cost of goods sold statement for last year.
Brody Company | |
Statement of Cost of Goods Sold | |
For Last Year | |
Cost of goods manufactured | $ |
Add: Beginning inventory, Finished goods | |
Less: Ending inventory, Finished goods | |
Cost of goods sold | $ |
6. Prepare an income statement for last year. Show the percentage of sales that each line item represents. When required, round the percent to four decimal places before converting to a percentage. For example, .88349 would be rounded to .8835 and entered as 88.35.
Brody Company | ||
Income Statement | ||
For Last Year | ||
Percent | ||
Sales | $ | % |
Cost of goods sold | % | |
Gross margin | $ | % |
Less: Operating expenses | ||
Selling expenses | % | |
Administrative expenses | % | |
Operating income | $ | % |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started